US Economy and Credit Markets Ended March 6, 2020
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Treasury yields plunged to record lows last week as the coronavirus continued to roil financial markets. The yield on the U.S. 10-year Treasury note fell below 0.7% for the first time last week and has been cut in half in just two weeks as demand for haven assets remained strong. The economic risks posed by the coronavirus prompted the Fed to cut rates on Tuesday, ahead of its next scheduled two-day meeting on March 17 and 18. The half-percentage-point cut was the Fed's first emergency rate cut since the 2008 financial crisis. Even with the move, the Fed is still widely expected to cut rates by another 50 basis points at its March meeting. Economic data released on Friday showed the U.S. economy added 273,000 jobs in February over the prior month, which easily exceeded expectations, and the unemployment rate fell from 3.6% to 3.5%. The strong jobs report had little effect on financial markets, however, as the economic impact of the coronavirus will need to be assessed in the coming months. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Wednesday: February CPI MoM (0.0%, 0.1%), March 6 MBA Mortgage Applications (N/A, 15.1%); Thursday: March 7 Initial Jobless Claims (217k, 216k), February PPI Final Demand MoM (-0.1%, 0.5%); Friday: March Preliminary U. of Mich. Sentiment (95.0, 101.0).
Posted on Monday, March 9, 2020 @ 8:14 AM

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.