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Bob Carey
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  US Economy and Credit Markets Ended April 8, 2022
Posted Under: Weekly Market Commentary

The Treasury market continues to scratch at its eyes as rising yields are putting significant pressure on price. Particularly of note, the 10- year yield went from 2.395 to 2.700 Monday to Friday. A knock-on effect is that the curve meaningfully steepened. The Minutes of the Federal Open Market Committee dated March 15-16 were released April 6, and the minutes coupled with Tuesday comments from Federal Reserve Governor Lael Brainard, widely regarded as a dovish Governor, sent yields thrusting higher. Her comments noted a strong recovery will enable a more rapid reduction of the balance sheet compared to the last reduction in 2017-2019.  Her Tuesday comments were corroborated by the Wednesday meeting notes which said "discussion was preceded by a staff presentation that reviewed the Committee's 2017–19 experience with balance sheet reduction and presented a range of possible options for reducing the Federal Reserve's securities holdings over time in a predictable manner. All of the options featured a more rapid pace of balance sheet runoff than in the 2017–19 episode." Prior to the news eclipse that was the Federal Reserve, last Tuesday saw an increase to the March ISM Non-Manufacturing Index reading at 58.5; greater than the 50 denoting expansion. Also reported, the Trade deficit was recorded at $89.2 billion, high, but in-line with the prior month. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Tuesday: March CIP MoM (0.5%, unch.); Wednesday: April 8 MBA Mortgage Applications (n/a, -6.3%); Thursday: April 9 Initial Jobless Claims (175k, 166k) and University of Michigan April Preliminary Sentiment (58.9, 59.4); Friday: April Empire Manufacturing (1.0, -11.8) and March Industrial Production MoM (0.4%, 0.5%).
Posted on Monday, April 11, 2022 @ 8:12 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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