Better than expected ISM, with the prices paid component markedly higher, coupled with continued digestion of recent strong data and Powell's 60 Minutes appearance lead to a pop higher in yields. Maybe markets are starting to come back around to the idea that the Fed won't be cutting 6-7 times this year. The recent moves higher following last Friday's jobs numbers have the 10Y yield back to 4.15%, which marks a solid move off recent lows of ~3.80%. The 2Y is almost back to 4.50% off recent low of 4.20%.
The last week has me wondering whether we've re-entered the end of summer/early fall of 2023. It was during that time period that all of the talk from the Fed (including Powell's J-Hole speech) seemed to focus on uncertainty around estimates of the neutral rate of interest. We'll have to wait for both the NY and Richmond Fed to update their estimates of the neutral rate. Yesterday we had Kashkari out wondering if neutral rate has increased post pandemic https://www.minneapolisfed.org/article/2024/policy-has-tightened-a-lot-how-tight-is-it
On the day ahead it's Fedspeak starting at noon.
XTOD: ISM Services 53.4, Exp. 52.0, Last 52.3 ISM Prices Paid explode to 64.0, Exp. 56.4, Last 56.7 When is the Fed hiking again?
XTOD: "Stock options is always an expense. Its in kind but Analysts reverse it. It's like a pizza store owner giving away free pizza because u can't supplement the wage because u can't pay them high enough wage. It's eating into profit & got to be factored in" 👌--- @AswathDamodaran
XTOD: There's a difference between "I don't have the time" and "This isn't a priority." It's okay to communicate the latter even though you always say the former. Be brave, friends. We're all protecting our time and attention.
XTOD: "By working faithfully eight hours a day, you may eventually get to be a boss and work twelve hours a day." — Robert Frost, American poet and winner of four Pulitzer Prizes
https://x.com/zerohedge/status/1754520535856185429?s=20
https://x.com/CharlieMunger00/status/1754624997212180901?s=20
https://x.com/brianportnoy/status/1754563784222331237?s=20
https://x.com/tferriss/status/1754366432232816854?s=20
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