Had a heavy post for today planned …. about a pretty complicated event occurring in the Capital Markets…just moved it to Wednesday with a bit of travels this week and continued Capital Market movement from a Friday Economic report… wanted to move the later to the front today as it is a bit simpler, but super important as well…
Hang on, both posts this week a bit heavy, but will keep today’s short!
Hot Jobs Numbers Puts Pressure on FED, Rates (short end) and Capital Markets
When GOOD news is bad … it happens in this part of the cycle!
On Friday February 3, 2023 the BLS (Bureau of Labor Statistics) released the “Employment Report” for January 2023…. all about expectations versus actual….
Anyone extrapolating that downward sloping chart – Far Right below. would have certainly NOT EXPECTED that huge January 23 bar… anyone would include all of Wall Street and the FOMC – (Very lagging reading, likely revised, BUT much different from expectations)
New Jobs Expected 190k ACTUAL 571K — Ya ya will be revised, but for now is what Wall Street has…
The good news is from this report lots of jobs and more than expected…. Bad News… Fed may continue to be aggressive in slowing the economy… aka Higher short term rates…
Big move in the 2 Year Treasury, one of the most in sync with Fed rate moves…
Ok… all caught up from last week…be sure to have your coffee before reading Wednesday’s post!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Heads Up for a Busy “Headlines” Week – CPI Consumer Price Index aka Inflation Measurement – FOMC Federal Open Market Committee Rate Increase Announcement …
While the Holiday Season is getting closer, Economic data must go on….
On Tuesday we get the CPI (Consumer Price Index) bluntest of instruments for Inflation report from the BLS (Bureau of Labor Statistics) ….
All about expectations versus actual, “for the moment” …. Last months was 7.7% year over year and the expectation this time is for 7.3% …
Above the 7.3% will likely lead to disappointment and below or well below a short term applause …
On Wednesday Jerome Powell and his buddies at the FOMC (Federal Open Market Committee) will in all likelihood raise rate the much expected .50% to the 4.25% – 4.50% level….
While it is not super obvious from the chart above, the longer term 10 year treasury (blue) is much lower and trending lower than the shorter term 2 year treasury …. this is an inverted yield curve….
With Powell pushing short term rates higher with a .50% increase, the interesting observation will be what the 10 year does, as the 2 year is captive to Powell’s movements, being so near in time frame!
Sorry for the heavy start to the week… we promise an easier rest of the week… but wanted to let you behind the curtains of our watch this week….
Have a Great “Busy Economics” start to the week!
John A. Kvale CFA, CFP
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Posted in Economy, FOMC, General Financial Planning, Investing/Financial Planning, Market Comments
Tagged BLS, BLS CPI, CPI, Fed Funds Rate, FOMC, Interest Rates