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Market Snapshot 09.11.23- Bonds Are Under A Little Pressure

Good Monday AM,

No economic news to share today though bonds are under a little pressure.

The ECB meets later this week and will likely raise rates although here, it all depends on what Wednesday’s CPI numbers show. I think tame and I think the Fed pauses but markets are consolidating up just to be flat before the news.

With the lack of economic data to dissect, I thought I would share a few pieces from around…

Bloomberg and the WSJ come to mind. Economy is cooling from most metrics.. The Fed could and should be done for the moment. How do we get sellers to pop their heads out of their caves?


An Important Shift in Fed Officials’ Rate Stance Is Under Way

For more than a year, Federal Reserve policy makers were unanimous that they would rather raise interest rates too much than too little—that is how serious they considered the threat of persistently high inflation. That is changing. Some officials still prefer to err on the side of raising rates too much, reasoning that they can cut them later. Now, though, other officials see risks as more balanced. They worry about raising rates and causing a downturn that turns out to be unnecessary or triggering a new bout of financial turmoil, Nick Timiraos writes.

The shift toward a more balanced bias on rates is driven by data showing easing inflation and a less overheated labor market. In addition, the unusually rapid rate increases implemented over the past 1½ years are expected to continue crimping demand in coming months.

After staving off recession for longer than many thought possible, the US consumer is finally about to crack, according to Bloomberg’s latest Markets Live Pulse survey. More than half of 526 respondents said that personal consumption — the most important driver of economic growth — will shrink in early 2024, which would be the first quarterly decline since the onset of the pandemic. The finding is at odds with the optimism that’s permeated US equity markets for most of the summer, as cooling inflation and low unemployment bolstered hopes for a so-called soft landing. On Sunday, Treasury Secretary Janet Yellen said she’s increasingly confident that the US will be able to contain inflation without major damage to the job market. Should the economy stop growing it could mean more downside for stocks, which have already slipped from late-July highs.

Please remain safe and stay healthy!