Market Update
Fed Remains Hawkish Ahead of New Jobs Data
2022-10-05
This morning equity markets moved lower and Treasury yields are up with the 10-year yield trading modestly above 3.75%. The recent inflation data continued to fall off its 40 year highs seen earlier this summer, but remained elevated above 8% year over year. And the latest jobs data continues to show healthy job market conditions with new jobs data coming this week. In response, the Fed continues rapidly tightening monetary policy, making a third 75bps hike in September. This results in the cumulative amount of hikes this year to 3.00% and the Fed has also begun to reducing the size of its balance sheet. The recent comments from Fed Chair Powell and other FOMC voting members continue to be very hawkish as the Fed's priority remains halting inflation. There continues to be concern that the rapid increase in rates may send the US into a recession. The question of whether the Feds rate hikes can tame inflation, without sending the economy into a recession remains in the front of investors minds.
-CMS Staff
Treasury Yields
Benchmarks
Term Current Last Month
3 Month 3.38% 2.88%
6 Month 3.98% 3.31%
2 Year 4.17% 3.39%
5 Year 3.98% 3.29%
10 Year 3.76% 3.18%
30 Year 3.76% 3.34%
PRIME: 6.25%
DJIA: 30,078.39
Crude Oil (WTI): $87.79
YEN: 144.6500
Gold: $1,708.52
1 Year CMT: 4.14%
1 Month LIBOR: 3.1857%
Fed Funds Effective: 3.08%
Next FOMC Meeting: Nov 1-2nd, 2022
Source: Bloomberg
Economic Calendar- Week of 10/3/2022
Forecast Actual Prior Revised
10/3/2022 Manufacturing PMI
Construction Spending MoM
ISM Manufacturing Employment
ISM Manufacturing New Orders
ISM Manufacturing PMI
ISM Manufacturing Prices
10/4/2022 Durables Ex Defense MoM
Durables Ex Transport MoM
Factory Orders MoM
Factory Orders Ex Transport MoM
JOLTs Job Openings
10/5/2022 MBA Mortgage Applications
ADP Nonfarm Employment
Trade Balance
S&P Global Composite PMI
Services PMI
ISM Non-Manufacturing Business Activity
ISM Non-Manufacturing Employment
ISM Non-Manufacturing New Orders
ISM Non-Manufacturing PMI
ISM Non-Manufacturing Prices
10/6/2022 Initial Jobless Claims
Continuing Jobless Claims
Challenger Job Cuts YoY
Challenger Job Cuts
10/7/2022 Average Hourly Earnings YoY
Average Hourly Earnings MoM
Average Weekly Hours
Government Payrolls
Manufacturing Payrolls
Nonfarm Payrolls
Participation Rate
Private Nonfarm Payrolls
U6 Unemployment Rate
Unemployment Rate
Wholesale Trade Sales MoM
Consumer Credit
51.8 52.0 51.5
-0.3% -0.7% -0.4% -0.6%
53.0 48.7 54.2
47.1 51.3
52.2 50.9 52.8
51.9 51.7 52.5
-0.8% -0.9%
0.3% 0.2%
0.3% 0.0% -1.0%
0.2% -1.1%
10.775m 10.053m 11.239m 11.170m
-14.2% -3.7%
200k 208k 132k 185k
-$67.70b -$67.40b -$70.70b -$70.50b
49.5 49.3 44.6
49.2 49.3 43.7
57.0 59.1 60.9
53.0 50.2
60.6 61.8
56.0 56.7 56.9
68.7 71.5
203k 193k
1,345k 1,347k
30.3%
20.485k
5.1% 5.2%
0.3% 0.3%
34.5 34.5
7.0k
20k 22k
250k 315k
62.4%
270k 308k
7.0%
3.7% 3.7%
0.4% -1.4%
$24.50b $23.81b