US Economy and Credit Markets Ended Nov. 5, 2021
Supporting Image for Blog Post

U.S. Treasury bond yields were mostly down last week as investors digested the Federal Reserve's announcement and Friday's jobs report. The long end of the yield curve increased in response to the Federal Reserve's announcement on Wednesday. The Federal Reserve announced they will start tapering or reducing their asset purchases per month. When questioned about interest rates, Federal Reserve Chairman Jerome Powell stated rate hikes could happened in the back half of next year, but the Federal Reserve will remain "data dependent" in their decisions. Regarding inflation, Jerome Powell and the Federal Reserve's certainty in inflation being transitory continues to wane as higher prices persist. The week wrapped up with Friday's stronger than expected jobs report. Nonfarm payrolls increased by 531,000 in October, well above the expected 450,000, and the unemployment rate dropped 20 basis points last month to 4.6%. Though topline jobs data beat expectations, Treasury yields dropped at the end of the week as stale labor force participation and impending vaccine mandates cloud the outlook. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Tuesday: October NFIB Small Business Optimism (99.3, 99.1), October PPI Final Demand MoM (0.6%, 0.5%), October PPI Final Demand YoY (8.7%, 8.6%); Wednesday: November 5 MBA Mortgage Applications (N/A, -3.3%), November 6 Initial Jobless Claims (263k, 269k), October 30 Continuing Claims (N/A, 2105k), October CPI MoM (0.5%, 0.4%), October CPI YoY (5.8%, 5.4%), September Final Wholesale Inventories MoM (1.1%, 1.1%), October Monthly Budget Statement (N/A, -$61.5b); Friday: November Preliminary University of Michigan Sentiment (72.5, 71.7).
Posted on Monday, November 8, 2021 @ 8:18 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.