Trade and the Fed

October 7, 2019

Trade and the Fed Photo

Last week’s economic data was weak almost across the board. Surveys from the Institute for Supply Management for both manufacturing and non-manufacturing activity came in below estimates. The manufacturing survey should raise recessionary concerns, while September employment data was mixed, with a weak number of new jobs and average hourly earnings. At the same time, however, the unemployment rate fell from 3.7% to 3.5%, its lowest level in 50 years. Low unemployment and a strong consumer continue to carry the U.S. economy. 

The week ahead will be focused on trade as the Chinese government comes to Washington, D.C., to negotiate a trade deal. In Europe, the slow-moving Brexit process will be closely watched. Given weak economic data and the dialogue for more Federal Reserve easing, I anticipate bond prices to experience heightened volatility. 

Tags: ISM Manufacturing Index | Jobs report | Brexit | Volatility

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