Halyard’s Weekly Wrap
our thoughts on the past week’s market activity, economic releases, and Federal Reserve commentary
11/14/25 – Hawkish Fed speak mid-week puts a December rate cut into question.
The 43-day vacation government workers have been enjoying came to an end this week with no resolution and a very real possibility that it could happen again at the end of January. That means that the “bean counters” at the Bureau of Labor statistics have a mountain of data to sort through before it’s released to the public. Most of the jobs data for September had already been collected prior to the shutdown and that report is expected to be released on November 20th. The White House spokesperson said that the October CPI and employment reports are likely to never be released, but National Economic Council Director Kevin Hasset contradicted that by saying that the October jobs figure would be released but without the unemployment rate. The problem with compiling the October data is that it would likely delay the calculation of the November data and risk pushing the release date past the December 5th scheduled release. That means that there’s a risk that when the FOMC meets in December, they will not yet have the November employment data. In essence, the BLS has a lot of sorting out to do!
With that as a backdrop a December rate cut, which had been a foregone conclusion back in September, is now not a done deal. Fed Fund futures are forecasting a 50/50 chance of a cut and given the recent comments from Fed speakers those odds are appropriate. The focus of their comments has shifted from employment concerns to inflation worry. This week John Williams commented that the Fed may return to asset purchases, also known as quantitative easing, soon. Keeping the overnight rate unchanged while buying securities in the open market is tantamount to driving with one foot on the accelerator and one on the brake.
Despite the confusion on how the BLS is going to disseminate economic data and a mini meltdown in tech stocks, the bond market barely budged this week. The 2-year note closed at 3.60%, 3 basis points above last Friday’s close. The 30-year bond also closed 3 basis points higher.
Hopefully by this time next week we’ll have more clarity on the state of the economy and how the BLS plans to release back data.
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Halyard’s Weekly Wrap – 09/03/21
/in Weekly Wrap/by halyardThe Bureau of Labor Statistics reported that the U.S. economy only added 235,000 new jobs is August. That was well below the anticipated 733,000 that was the consensus expectation. The immediate question is that number weak enough to convince the FOMC to postpone the tapering of open market purchases. Given the verbal jousting of the various Fed Presidents and Governors over the last few weeks, we conclude that the answer is a solid Maybe.
Halyard’s Weekly Wrap – 08/27/21
/in Weekly Wrap/by halyardPowell turned ever so mildly dovish in his comments to the virtual Jackson Hole Central Bank meeting on Friday. Despite a cadre of Central Bankers calling for an immediate halt to the open market purchases, the Chairman said the Open Market Committee is likely to commence tapering before the end of 2021. We believe the street had set up for more hawkish language, with some looking for an announcement that taper would begin in September. That was a foolish call! While the Fed doesn’t always look to the calendar in making policy announcements, the Chairman had to realize that doing so on the last Friday of August would rock the market. Instead Treasuries traded sideways which was enough to drive the S&P 500 to another record high.