The fed cannot ignor this data, payroll and 4.4% unemployment, CPI and PPI will tip the scale, unleaded gasoline rises 5 cent every week, and is up 40% in a month. This is going to send PPI and CPI thru the roof. At least you would think so, who knows the goverment my rig the numbers to keep the fed on the sidelines.
10 year should be 6% min. fed's ass kissing of wall street has jeopardized its ability to see inlfation. inflation is raging
ya well...Dec 07 Eurodollars say we are getting a cut... Personally, I think you are right, but the market is suggesting otherwise....buy puts!
CPI numbers are massaged to keep it low. Families paying rent, gas, food, healthcare costs, etc. can feel the difference between actual inflation and the CPI numbers being reported. Dollar is declining and gold / commodities are going higher. This can't be good for inflation. Now congress is talking about taxing paper products from China, etc and more to follow. This can't be good for inflation either.
the fed will STAY paused with this data. Why? housing sucks and the consumer is slowing down. Why take the risk? there are no hikes coming to a theatre near you.
personally with 53,000 in construction jobs added, I don`t think any of these numbers are very reliable indicators of anything except that government data, just like everything else the government does, yes I am generalizing, sucks!
and last month they were cutting and the 30 yr was 4 pts higher. Whats changed in 30 days? nothing fundamentally, which is why the fed is changing nothing fundamentally. Only when foreclosure rates come under control will the fed even consider raising rates.
The 30 year trades independent of Fed policy. The curve is in a bit of a steepening mode for the reasons you describe. Inflation is real. Bad for Bonds. The economy is suspect. Good for the short end of the curve. IMO, 18 months from now, long bond yields will be 7%.