US Economy and Credit Markets Ended Sept. 11, 2020

Longer-term Treasury yields fell last week while short-term yields rose slightly. On Tuesday, Treasury yields fell as investors bought government bonds amid the sharp decline in tech stocks. Initial jobless claims in the week ending September 5 were 884K, which were unchanged from the previous week's revised level. While initial claims remain above the pre-pandemic high of 695K, 884K is the lowest level of initial unemployment claims since broad economic shutdowns took effect in March, suggesting the labor market continues to make progress in its recovery. The Consumer Price Index rose 0.4% in August over the prior month, driven by a 5.4% increase in used-car prices, and 1.3% over the prior year. This week, the Fed is expected to leave rates unchanged following its policy meeting on Tuesday and Wednesday and may offer more details surrounding its recent policy change. The Fed said recently it would no longer preemptively raise interest rates to prevent higher inflation. Instead, it will wait to tighten monetary policy until there is clear evidence of inflation running above its target of 2%. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Tuesday: August Industrial Production MoM (1.0%, 3.0%), September Empire Manufacturing (6.0, 3.7); Wednesday: September 16 FOMC Rate Decision – Upper Bound (0.25%, 0.25%), September 11 MBA Mortgage Applications (N/A, 2.9%), August Retail Sales Advance MoM (1.0%, 1.2%); Thursday: September 12 Initial Jobless Claims (850k, 884k), August Housing Starts (1,478k, 1,496k); Friday: September Preliminary U. of Mich. Sentiment (75.0, 74.1), August Leading Index (1.3%, 1.4%).
Posted on Monday, September 14, 2020 @ 9:14 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.