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Markets Expected More Dovishness From Powell
Markets Expected More Dovishness From Powell
AM data was a mixed bag that left bonds slightly weaker on the day, but not in an alarming way. GDP was mixed, coming in much stronger at the headline, but with lower domestic demand numbers. PCE prices were revised 0.2 higher for the quarter, meaning that tomorrow's monthly PCE data has a 1 in 3 chance of being the culprit (slightly raises risk of higher inflation reading). But the day's big focus was on Fed Chair Powell's press conference. The announcement itself was inconsequential. Powell had a chance to get a bit more dovish in response to recent inflation data, but instead stuck to the exact same script (hoping tariff inflation is a one-off, but wants to wait and see, and has luxury of doing so based on 4.1% unemployment). Bottom line: no bone thrown to rate cut optimists = Fed Funds Futures priced in lower odds for near-term cuts. This spilled into bonds only modestly, leaving 10yr yields in line with AM highs and leaving the broader trend as sideways as ever.
Markets Expected More Dovishness From Powell
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Thursday, Jul 31 | |||||
| 7:30AM | Jul Challenger layoffs (k) | Jul | 62.075K | 47.999K | |
| 8:30AM | Jul/19 Continued Claims (ml) | Jul/19 | 1946K | 1960K | 1955K |
| 8:30AM | Jun Personal Income (%) | Jun | 0.3% | 0.2% | -0.4% |
| 8:30AM | Jun Inflation-Adjusted Spending (Consumption) (%) | Jun | 0.3% | 0.4% | -0.1% |
| 8:30AM | Jun Core PCE Inflation (y/y) (%) | Jun | 2.8% | 2.7% | 2.7% |
| 8:30AM | Jul/26 Jobless Claims (k) | Jul/26 | 218K | 224K | 217K |
| 8:30AM | Jun Core PCE (m/m) (%) | Jun | 0.3% | 0.3% | 0.2% |
| 8:30AM | Q2 Employment costs (%) | Q2 | 0.9% | 0.8% | 0.9% |
| 9:45AM | Jul Chicago PMI | Jul | 47.1 | 42 | 40.4 |
| Friday, Aug 01 | |||||
| 8:30AM | Jul Participation Rate | Jul | 62.3% | ||
| 8:30AM | Jul Average earnings mm (%) | Jul | 0.3% | 0.2% | |
| 8:30AM | Jul Unemployment rate mm (%) | Jul | 4.2% | 4.1% | |
| 8:30AM | Jul Non Farm Payrolls (k) | Jul | 110K | 147K | |
| 9:45AM | Jul S&P Global Manuf. PMI | Jul | 49.5 | 52.9 | |
| 10:00AM | Jun Construction spending (%) | Jun | 0.0% | -0.3% | |
| 10:00AM | Jul ISM Manufacturing Employment | Jul | 45 | ||
| 10:00AM | Jul Total Vehicle Sales (ml) | Jul | 16.0M | 15.3M | |
| 10:00AM | Jul Sentiment: 1y Inflation (%) | Jul | 4.4% | 5% | |
| 10:00AM | Jul Sentiment: 5y Inflation (%) | Jul | 3.6% | 4% | |
| 10:00AM | Jul Consumer Sentiment (ip) | Jul | 62 | 60.7 | |
| 10:00AM | Jul U Mich conditions | Jul | 66.8 | 64.8 | |
| 10:00AM | Jul ISM Mfg Prices Paid | Jul | 70 | 69.7 | |
| 10:00AM | Jul ISM Manufacturing PMI | Jul | 49.5 | 49 | |
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