The sinking Fed terminal rate
Main U.S. indexes rally: Nasdaq out front, up ~2.25%
All S&P 500 sectors green; Real Est leads
Dollar edges up; crude gains; bitcoin up >4%; gold dips
U.S. 10-Year Treasury yield jumps to ~3.91%
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
THE SINKING FED TERMINAL RATE
With the market currently pricing an aggressive rate cut by the Federal Reserve, the U.S. central bank's terminal rate, or that level of rate considered neither restrictive or accommodative, has dropped to 3%, according to TD Securities.
It hit a high of 4.15% in mid-May.
For 2024, fed funds futures have priced about 106 basis points in cuts and about 83 bps more until June of next year.
"Given that the outlook for inflation has increasingly come into better balance, we don't think the Fed is about to risk an unnecessary deterioration in the labor market to reach the 2% objective. Risks have become truly two-sided, if not tilted toward downward employment outcomes," writes Gennadiy Goldberg, head of U.S. rates strategy at TD Securities.
It wasn't too long ago that bond fund managers were forecasting a shallow easing cycle given sticky inflation and a still solid labor market. Many of them believed that the Fed's terminal or neutral rate would be at 3.5%-4%.
But things changed since that softer-than-expected U.S. jobs report.
Economic data will still be the focus in the run-up to the Fed's September meeting, but investors are no longer solely focused on inflation. Stronger numbers in key indicators could potentially lead market pricing to rebound, according to TD strategists in note.
For instance, a sharp correction lower in the unemployment rate next month could leave the market re-pricing cuts.
The Fed could lay out what its thinking at the Jackson Hole Symposium on August 22-24, or they can also comment following the August jobs report on September 6.
(Gertrude Chavez-Dreyfuss)
*****
FOR TUESDAY'S EARLIER LIVE MARKETS POSTS:
JGBS 'TREMENDOUSLY UNINTERESTING,' BUT HARD TO IGNORE - CLICK HERE
STIFEL STICKS WITH S&P 500 STILL SELLING DOWN TO 5000 - CLICK HERE
BUYING S&P 500 AFTER 5% SLUMP IS TYPICALLY PROFITABLE - GOLDMAN
WALL STREET BOUNCES BACK - CLICK HERE
THE VIX MADE A STATEMENT, BUT WILL IT HAVE MORE TO SAY? - CLICK HERE
RETAIL TRADERS' LONG TERM POSITIONING INTACT AFTER MONDAY'S ROUT - CLICK HERE
BANKS: "GOLD MEDAL FOR VOLATILITY" - CLICK HERE
SHARP MARKET WEAKNESS "AN OVERREACTION", SAYS UBS - CLICK HERE
BATTERED BANKS & TECH LEAD A MODEST BOUNCE - CLICK HERE
FUTURES POINT TO TURNAROUND TUESDAY - CLICK HERE
FED COMPOSES FRAUGHT MARKETS - CLICK HERE
Aloqador aktivlar
Eng oxirgi yangiliklar
Javobgarlikdan voz kechish: XM Group korxonalari har biri faqat ijro xizmatlarini koʻrsatadi va onlayn savdo platformamizdan foydalanish huquqini beradi, bu odamga veb-saytda yoki veb-sayt orqali mavjud boʻlgan kontentni koʻrish va/yoki undan foydalanishga ruxsat beradi hamda uni oʻzgartirishga moʻljallanmagan va uni oʻzgartirmaydi yoki kengaytirmaydi. Bunday kirish va foydalanish huquqi doimo quyidagilarga boʻysunadi: (i) Shartlar va qoidalar; (ii) Risklar haqida ogohlantirish; va (iii) Javobgarlikni toʻliq rad etish. Shuning uchun bunday kontent umumiy maʼlumot sifatida taqdim etiladi. Xususan, shuni esda tutingki, bizning onlayn savdo platformamiz mazmuni moliyaviy bozorlarda biror bitimni amalga oshirishga oid maslahat yoki taklif emas. Har qanday moliyaviy bozorda savdo qilish sizning kapitalingiz uchun jiddiy risk darajasini oʻz ichiga oladi.
Onlayn savdo platformamizda chop etilgan barcha materiallar faqat taʼlim/axborot maqsadlari uchun moʻljallangan va unda moliyaviy, investitsiya soligʻi yoki savdo maslahatlari va tavsiyalar; yoki bizning savdo narxlarimizning qaydlari; yoki har qanday moliyaviy vositalar bilan bitim tuzish maslahati yoki taklifi; yoki sizga kerak boʻlmagan moliyaviy reklama aksiyalari hisoblanmaydi
Har qanday uchinchi tomon kontenti, shuningdek XM tomonidan tayyorlangan kontent, masalan: fikrlar, yangiliklar, tadqiqotlar, tahlillar, narxlar va boshqa maʼlumotlar yoki bu veb-saytda joylashgan uchinchi tomon saytlariga havolalar umumiy bozor sharhi sifatida "boricha" taqdim etiladi va investitsiya maslahatini tashkil etmaydi. Har qanday kontent investitsiya tadqiqoti sifatida talqin qilinsa, siz bunday kontentni investitsiya tadqiqotlarining mustaqilligini ragʻbatlantirish uchun moʻljallangan qonun talablariga muvofiq moʻljallanmagan va tayyorlanmaganligini eʼtiborga olishingiz va qabul qilishingiz kerak, shuning uchun unga tegishli qonunlar va qoidalarga muvofiq marketing kommunikatsiyasi sifatida qaraladi. Mustaqil boʻlmagan investitsiya tadqiqoti va yuqoridagi maʼlumotlarga oid risk haqida ogohlantirishimizni oʻqib chiqqaningizga va tushunganingizga ishonch hosil qiling, unga bu yerdan kirish mumkin.