Halyard’s Weekly Wrap – 12/10/21
Treasury yields drifted higher and stocks closed at or near record highs in somewhat muted trading this week. The price action was a little surprising given the outsized economic data reported. The least watched, but one of our favored measures, the Job Openings and Labor Turnover Survey (JOLTS), counted 11,033,000 available and unfilled jobs in the economy. That was only the second instance that JOLTS topped more than 11 million. The second economic surprise was initial jobless claims for unemployment insurance which counted 184,000 applicants for the week ended December 4th. That’s the lowest number of claimants in 52 years. There was some chatter that the seasonal adjustment may have played a role, but that doesn’t diminish the direction of the claims, especially when taken in tandem with the JOLTS surprise. The rise in the consumer price index of 6.8% year-over-year was not exactly a surprise since it matched consensus expectations, but it was highest rate since 1982. Coincidently, that was near the beginning of Paul Volcker’s tenure as, arguably, the most Hawkish Fed Governor ever. That’s not to imply that the Fed is going to need to take the overnight rate to 22% as did Volcker. But that trifecta of economic data is likely to make the Fed Chairman’s post-FOMC press briefing an uncomfortable one next week. Granted, he has joined the chorus of Fed Governors and Presidents calling for a more accelerated taper. But it’s only been a month since he voiced that opinion. That his reading of the economy has been so wrong for so long should arm the press core with plenty of pointed questions.
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