Good Thursday AM,

Unemployment claims were lower than expected and manufacturing data fell like a rock, but the reason bonds (and stocks) are struggling isn’t from today’s data. The Fed yesterday did hold rates at the current level and did bag the drum they may hike again but more importantly; they revised their expectation for next year.

The higher for longer plan is taking its toll today.

From the WSJ:

Federal Reserve officials voted to hold interest rates steady at a 22-year high and revealed a divide over whether they should raise them once more this year, with most leaning toward another increase. Fed Chair Jerome Powell said that officials didn’t need to decide yet whether to lift rates again after a historically rapid series of increases over the past 18 months and as they await evidence that a recent inflation slowdown can be sustained, Nick Timiraos reports.

Fed officials also indicated they expect to keep rates higher for longer through 2024 than they anticipated earlier this year.

Fed officials raised their benchmark federal-funds rate at their previous meeting in July to a range between 5.25% and 5.5% to combat inflation by slowing economic activity. Officials appeared to be more confident than they were in their last set of projections in June that they could bring inflation down to their 2% goal without a sharp economic slowdown, achieving a so-called soft landing.

And if you want to see how higher rates are impacting peoples ability to buy, this graph shares it all.

Better days on the horizon…

Please remain safe and healthy, and make today great!