Bryant Bank Market Update - November 2, 2023

Good morning, interest rates have moved down substantially over the last 24 hours in response to the Treasury announcing less quarterly debt issuance than anticipated, weaker-than-expected manufacturing and private employment data, and, of course, Jerome Powell’s post-announcement press conference.?

The 10yr UST yield has fallen a whopping 30 basis points since Tuesday’s close, coming down from 4.94% to 4.63% earlier today.? Here’s where the benchmarks are now:

Fed Chair Jerome Powell made 100% clear that the Fed is prepared to hike rates further if needed, so further tightening is not out of the question, but he said a few other things that led markets to believe the FOMC is transitioning from “pause” to “hold” and that the Fed Funds rate has peaked.

In their last Summary of Economic Projections (released quarterly), the majority of Committee members penciled in another rate hike by the end of this year, so it’s notable that Powell went out of his way to downplay it.? He also acknowledged that the rise in bond yields likely means less policy action will be required and emphasized how far they’ve come in stifling inflation, leading former New York Fed Chair Bill Dudley to assess that Powell is “quite confident that policy is restrictive enough to slow the economy down.”

We hope you have a great day!? Please let us know if there is anything we can be doing to better serve your needs.

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Quote of the Day:? “If you do not tell the truth about yourself you cannot tell it about other people.”? --Virginia Woolf