Today’s Market Update

Fed Meeting Suggests Quicker Tightening Plans on the Horizon
2021-09-23

This morning equity markets moved higher and Treasury yields rose with the 10-year yield moving up around 1.40%.  The recent rise in COVID cases and elevated geopolitical turmoil has driven recent concerns about the outlook for economic growth.  Additionally, the Biden administration is focused on their $550 billion infrastructure program, which passed in the senate and is now being negotiated in the House, as the administration continues to urge its passage in order to move forward with their economic agenda.  Yesterday the FOMC wrapped its meeting and provided updated the projections that showed a quicker pace of tightening over the next year than shown in the June meeting projections.  Additionally, the Fed will begin to taper “soon”, but did not provide specifics on the exact timeline.  The hot topics across markets remain the accelerating COVID cases and how sticky the current inflation trend will be.  So far in US over 57% US adults have received at least one dose of a COVID-19 vaccine and all American adults are eligible to receive a vaccine.  To date, the US has recorded over 42.5 million coronavirus cases and more than 681,000 deaths according to data from John Hopkins.

-CMS Staff

Treasury Yields

Term  Current  Last Month
3 Month0.03%0.05%
6 Month0.04%0.04%
2 Year0.25%0.22%
5 Year0.92%0.77%
10 Year1.40%1.25%
30 Year1.91%1.87%
Yields updated each morning.
Source: Bloomberg

Benchmarks

PRIME3.25%
DJIA34,830.10
Crude Oil (WTI)$73.39
YEN110.1700
Gold$1,750.79
1 Year CMT0.07%
1 Month LIBOR0.0818%
Fed Funds Effective0.07%
Next FOMC MeetingNov 2-3rd, 2021
Source: Bloomberg

Economic Indicator Calendar

DateEventPeriodSurv (M)ActualPriorRevised
09/20NAHB Housing Market IndexSep747675
09/21Building Permits MoMAug6.0%2.3%
Building PermitsAug1.600m1.728m1.630m
Housing Starts MoMAug3.9%-7.0%-6.2%
Housing StartsAug1.555m1.615m1.534m1.554m
Current AccountQ2-$191.0b-$190.3b-$195.7b-$189.4b
09/22MBA Mortgage ApplicationsSep 154.9%0.3%
Existing Home Sales MoMAug-2.0%2.0%2.2%
Existing Home Sales Aug5.89m5.88m5.99m6.00m
09/23Initial Jobless ClaimsSep 16320k351k332k335k
Continuing ClaimsSep 92,650k2,845k2,665k
Chicago Fed National ActivityAug0.290.530.75
Manufacturing PMISep61.560.561.1
Markit Composite PMISep58.354.555.4
Services PMISep55.054.455.1
KC Fed Composite IndexSep2229
KC Fed Manufacturing IndexSep1022
09/24New Home Sales MoMAug1.0%
New Home SalesAug714k708k
Source: Bloomberg