US Treasuries
- Thursday’s range for UST 10y: 4.12% – 4.24%, closing at 4.225%
Bloomberg: Bessent Says Two-Year Treasuries Are Signaling Fed Should Cut
Treasury Secretary Scott Bessent said that the US Treasury market is sending a signal that the Federal Reserve ought to lower interest rates.
Bloomberg: Summers Says It’s Wrong to Say Markets Tell Fed It Should Cut
Former Treasury Secretary Lawrence Summers said that bond-market pricing doesn’t amount to a judgment call on what the Federal Reserve ought to do with interest rates, and that it would be a “very serious error” for policymakers to ease next week.
Upcoming US Treasury Supply
Tentative Schedule of Treasury Buyback Operations
- While “soft data” (surveys and opinions) is predicting economic disaster, “hard data” (actual economic indicators) shows the economy is currently stable.
- There is a debate on whether the Federal Reserve should cut rates in response to recession fears or focus on sticky inflation. This contrasts Wall Street’s preference for rate cuts with Main Street’s concerns about inflation.
- It is important to look at historical instances of negative GDP growth and the Federal Reserve’s response, particularly during the first and second quarters of 2022, when the Fed raised rates despite negative GDP figures due to inflation concerns.
- 50-50 chance of a recession occurring but this could shift dramatically in either direction within the next 90 days due to unusual economic circumstances of realigning the global trade system.
- Tariffs could lead to higher prices and a decrease in consumer spending, which could, in turn, affect GDP growth.
Intraday Commentary From Jim Bianco
However, 10s – 2s has been doing the opposite … steepening.
In Other News…
SupplyChainBrain: Airbus Tells U.S. Airlines They’ll Need to Pay Their Own Tariffs
Airbus SE said it won’t cover the cost of tariffs on its planes imported by U.S. airlines, setting up a clash with carriers unwilling to shoulder surcharges imposed by President Donald Trump.
OilPrice: OPEC Plot Twist? Bloomberg Survey Shows Production Drop in April
OPEC just pulled a plot twist. Instead of raising production as planned, the cartel’s April output dropped by 200,000 barrels per day (bpd) to 27.24 million bpd, according to a new Bloomberg survey published on Thursday.
Arbor Data Science: Drilling Down by Sam Rines
Business Insider: BNY calls workers back to the office 4 days a week.
Bank of New York Mellon Corp., known for helping financial clients clear and custody securities, is the latest bank to rein in remote work. In a memo to staff, the firm’s executive committee announced that it was asking employees to return to the office four days a week.
Upcoming Economic Releases & Fed Speak
- 5/02/2025 at 08:30am EST: Change in Nonfarm Payrolls/Change in Private Payrolls
- 5/02/2025 at 08:30am EST: Change in Manufacturing Payrolls
- 5/02/2025 at 08:30am EST: Nonfarm Payrolls 3-Mo Avg Change
- 5/02/2025 at 08:30am EST: Two-Month Payroll Net Revision
- 5/02/2025 at 08:30am EST: Unemployment Rate
- 5/02/2025 at 08:30am EST: Labor Force Participation Rate
- 5/02/2025 at 08:30am EST: Underemployment Rate
- 5/02/2025 at 08:30am EST: Average Hourly Earnings MoM and YoY
- 5/02/2025 at 08:30am EST: Average Weekly Hours All Employment
- 5/02/2025 at 10:00am EST: Factory Orders / Factory Orders Ex Trans
- 5/02/2025 at 10:00am EST: Durable Goods Orders / Durables Ex Transportation
- 5/03/2025 at 12:50pm EST: Fed’s Cook Gives Commencement Address
- 5/05/2025 at 09:45am EST: S&P Global US Services PMI & S&P Global US Composite PMI
- 5/05/2025 at 10:00am EST: ISM Services Index / Prices Paid / New Orders/ Employment
- 5/06/2025 at 08:30am EST: Trade Balance
- 5/07/2025 at 07:00am EST: MBA Mortgage Applications
- 5/07/2025 at 02:00pm EST: FOMC Rate Decision
- 5/07/2025 at 02:00pm EST: Fed Interest on Reserve Balances Rate
- 5/07/2025 at 03:00pm EST: Consumer Credit
- 5/08/2025 at 08:30am EST: Nonfarm Productivity
- 5/08/2025 at 08:30am EST: Unit Labor Costs
- 5/08/2025 at 08:30am EST: Initial Jobless Claims / Initial Claims 4-Wk Moving Avg / Continuing Claims
- 5/08/2025 at 10:00am EST: Wholesale Trade Sales MoM / Wholesale Inventories MoM
- 5/08/2025 at 11:00am EST: NY Fed 1-Yr Inflation Expectations