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Market Snapshot 2.2.23- Dodged Another Fed Bullet

Good Thursday AM,

We dodged another Fed bullet and now the market can do its thing.

Despite raising rates unsurprisingly by .25 yesterday and asserting the Fed had more work to do, Chair Powell during his press conference took on a more dovish tone. Chair Powell shared that recessionary notes (or disinflation as he preferred to call it) have become a bit louder and that the housing component of inflation metrics has been cooling. For the first time in several meetings, I believe Chair Powell that the Fed decisions are data dependent. The technical picture is and has been strong for the last several days. Mostly sideways but with a slight and growing bullish bias.

Today marked the 3rd or 4th day in a row with bond friendly news.

Eventually this news will always drip into the technical picture and begin to impact price. The ten year has broken below 3.40, currently at 3.36% and the next stop is 3.22. On mortgage bond prices, we have finally broken above the first line of resistance and are heading towards the next big line. If we break that and hold it, we will see more marked improvement. Tomorrow brings the jobs report and if the non-farm payroll numbers come out strong, we will fall down the hill we have been climbing for some time. Tough call but I would likely lock in today’s improvements and float down if tomorrow’s data comes in weak.

Both the BOE and the ECB hiked rates by .50 today.

Weaker dollar. That’s not so great when we are importing goods or traveling. Great when we are selling.

Not so long today, I’ll make up for it tomorrow.

Please remain safe and stay healthy, make today great!