The bond market is calmer after several days of high volatility

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Published Date 11/8/2024

Yesterday Powell and the Fed lowered the FF rate by 25 bps as was widely anticipated. It is six weeks before the next FOMC meeting (December 18th) the chatter about another rate cut from the Fed already circulating; some think so, others not so much but it is a long way to Tipperary. CMC FedWatch, a 67% chance of another quarter-point cut in December and a 33% chance of a pause that month.

At 9:30 am the DJIA opened +108, NASDAQ -10, S&P +8. 10 year at 9:30 am 4.31% -3 bp. FNMA 6.0 30 year coupon at 9:30 am +6 bps from yesterday’s close and +19 bp from 9:30 am yesterday.

The only data today, the University of Michigan mid-month consumer sentiment index expected at 70.8 from 70.5 in October, the index jumped to 73.0.

It may not feel like it after the volatility this week but this week yields declined for the first time in four weeks. Next week inflation data from CPI and PPI and Treasury’s October budget statement, October retail sales and October import and export prices.

Today is shaping up to be quiet after the very volatile week. There is still a pall hanging over markets although that initial fear of screaming inflation has dissipated and with the rate cut yesterday and some belief another one will happen in December the panic has lessened.

Source: TBWS

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