Yields Climb on Strong Economic Data, Fed Cut Uncertainty
The ever “data dependent” Fed is digesting stronger-than-expected retail and employment reports. The data contributes to the “no landing” narrative that has been taking hold over the past few weeks. Today’s weekly jobless claims report came in at 241,000, less than the expected 260,000. Retail sales jumped 0.4% in September after 0.1% last month, and above the expected 0.3%. Fed futures now indicate 42 bps of rate reductions by end of year. That range was about 75-100 bps about 2 weeks ago. Still to come before the November meeting: September PCE (10/31), October employment (11/1), and the 2024 election (11/6). The reports would have to be pretty strong to spur a “pause” at the next meeting. Stay tuned…
By David R. Pascale, Jr., Senior Vice President at George Smith Partners.