Rate Increases This Morning
Rates jumped today when payroll figures for June came in at more than twice what was estimated. Some categories rose over a quarter point on the news and the US Treasuries made some significant moves of their own. The 10-Year broke 4%, the highest it has been since early March, and the 2-Year passed 5% for the first time since June 2007. Members of the Federal Reserve have been chiming in saying things like they shouldn’t have paused rate increases in June, and that there will be more coming. The news caused an early drop across all indexes, but more interesting was the immediate response of mortgage rates. They generally take a day or so to catch up.
And as the 10, 5, and 2-Year Treasuries are still inverted, recently passing 1%, so a hard landing is still on the table. Some think the economy is so strong that even with the bad market news and ever-increasing interest rates, we are somehow living with it. I personally think they should be happy with 4% CPI and move on. The next CPI report for June will be here in a week, on July 12th. Then the next Fed rate decision is on the 25th.
