US Economy and Credit Markets Ended August 27, 2021

Treasury yields rose moderately on longer-term bonds over the course of the week as the Federal Reserve made comments at this week's annual Jackson Hole symposium. Early in the week, yields were mostly flat as investors speculated on the timing of the anticipated tapering process. Dallas Fed President Robert Kaplan said he would be open to changing his mind if there was evidence that Covid's delta variant was slowing the economy. However, evidence that daily new Covid cases are reaching a plateau and a growing number of government and private employer vaccine mandates have caused a softer demand for Treasuries and yields rose moderately. On Thursday, Kansas City Fed President Esther George said the economy has made substantial progress and they could begin to talk about backing off accommodative policy. Yields dropped on Friday when Fed Chairman Jerome Powell revealed that he was among the members that supported tapering later this year but was vague on when the Fed would make such a move. Two more regional Fed Presidents also discussed their support for tapering this year at the Jackson Hole event. Oil continued to move higher as the price rose 10% over the course of the week. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Tuesday: August MNI Chicago PMI (68.0, 73.4), August Conf. Board Consumer Confidence (123.0, 129.1); Wednesday: August 27 MBA Mortgage Applications (n/a, 1.6%), August ADP Employment Change (650k, 330k), August Final Markit US Manufacturing PMI (61.2, 61.2), July Construction Spending MoM (0.2%, 0.1%), August ISM Manufacturing (58.5, 59.5); Thursday: August 28 Initial Jobless Claims (346k, 353k), July Trade Balance (-$73.4b, -$75.7b), July Factory Orders (0.3%, 1.5%), July Final Durable Goods Orders (n/a, -0.1%); Friday: August Change In Nonfarm Payrolls (750k, 943k), August Unemployment Rate (5.2%, 5.4%)
Posted on Monday, August 30, 2021 @ 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.