The Personal Consumption Expenditures Price Index fell .9% in July from a year ago, slightly lower than the -.8% expected, but a little exaggerated compared to +.1% when food and energy is stripped out. The data was more or less a non-event as far as bonds were concerned, which can be expected since the data was right in line. The ten-year sold off on the data but quickly bounced back as equities opened lower. The morning volatility subsided soon after and bonds cruised toward the week’s close to end just slightly higher on the day.
Tomorrow we will get the minutes from the August 12th FOMC meeting. The market will be focused on any new mentioning of an exit strategy for the Fed, a major factor driving rates as of late. The two-year ended last week at 1.02% and has rallied more this morning to yield .992% as I write this. If more talk about an exit strategy is exposed in this week’s minutes the short end will certainly feel the pain, if not, stocks may feel it instead.
The employment report for the month of August will be released on Friday. The consensus forecast is for unemployment of 9.5%, .1% higher than the initial July number.
Tomorrow we will get the minutes from the August 12th FOMC meeting. The market will be focused on any new mentioning of an exit strategy for the Fed, a major factor driving rates as of late. The two-year ended last week at 1.02% and has rallied more this morning to yield .992% as I write this. If more talk about an exit strategy is exposed in this week’s minutes the short end will certainly feel the pain, if not, stocks may feel it instead.
The employment report for the month of August will be released on Friday. The consensus forecast is for unemployment of 9.5%, .1% higher than the initial July number.
Cliff J. Reynolds Jr., Investment Analyst
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