In addition to being shorter than normal due to the Memorial Day holiday, there wasn’t much meat on this week’s event calendar–at least not as far as the rate market was concerned. Earnings releases caused some volatility in the stock market, but rates drifted sideways to slightly lower after a larger drop on Tuesday. Interestingly enough,
Markets began the week with a hangover from last Friday’s late-day announcement of a US credit rating downgrade from Moody’s with both stocks and bonds losing ground in early trading. When bonds “lose ground,” it means lower prices and higher yields (aka “rates”). While those losses were ultimately almost completely erased by the end of Monday, bonds
The week began with some challenges for the rate market and a bounce for stocks following the US/China trade deal over the weekend. Stocks held their gains, but rates managed to move back down by the end of the week. Thursday was the only important day in that regard with rates benefiting from weaker Retail Sales
The market is constantly making bets on where the Fed Funds Rate will end up for any given moment many months into the future. As such, that rate expectation is constantly changing. It will continue to change, and it will change in different ways for different time frames. For example the futures contracts that pertain to
Whether you refer to it as “strong,” or “not as bad as feared,” this week’s economic reports were better than the market was prepared for. The result is moderately higher rates. Interest rates are driven by movement in the bond market, and the bond market is always interested in economic data. Occasionally, the economic data can
Please note that this newsletter is fiercely apolitical. There is no judgment on whether any given political development is good or bad. We are only interested in how financial and housing markets are reacting. Significant market volatility has been all over the news since the April 2nd tariff announcement, but this week went a long way
