February 18, 2021 Headlines

Treasury yields continue to leak higher on the long end of the curve this morning. Yesterday’s blowout January retail sales report is still fresh on market participants’ minds, and increased mortgage-related hedging activity amid this week’s curve steepening has likely fueled this week’s steepening as well. It is unclear at this point the Fed’s comfort level with the recent curve steepening, but we will get a chance to hear from Jerome Powell next Tuesday during his semi-annual monetary policy report before the Senate Banking Committee. Powell could potentially choose to verbally lean against this trend with talks of additional policy tools, including duration extension and yield curve control, or simply reinforce the idea that the Fed is well equipped to battle inflation in the future. A sharp rise in Treasury yields can weigh on risk assets and the flow of credit, which would presumably make the Fed uncomfortable while the economy is still attempting to climb out of the pandemic hole.

Jason Haley
Chief Investment Officer

Date Time	Event	Survey	Actual	Prior	Revised
2/18/2021	Housing Starts	1660k	1580k	1669k	1680k
2/18/2021	Housing Starts MoM	-0.50%	-6.00%	5.80%	8.20%
2/18/2021	Building Permits	1680k	1881k	1709k	1704k
2/18/2021	Building Permits MoM	-1.40%	10.40%	4.50%	4.20%
2/18/2021	Initial Jobless Claims	773k	861k	793k	848k
2/18/2021	Continuing Claims	4425k	4494k	4545k	4558k
2/18/2021	Import Price Index MoM	1.00%	1.40%	0.90%	1.00%
2/18/2021	Import Price Index ex Petroleum MoM	0.40%	0.90%	0.40%	—
2/18/2021	Import Price Index YoY	0.40%	0.90%	-0.30%	—
2/18/2021	Export Price Index MoM	0.80%	2.50%	1.10%	1.30%
2/18/2021	Export Price Index YoY	—	2.30%	0.20%	0.40%
2/18/2021	Philadelphia Fed Business Outlook	20	23.1	26.5	—
2/18/2021	Bloomberg Consumer Comfort	—	—	44.9	—
2/18/2021	Bloomberg Economic Expectations	—	—	39.5	—
2/19/2021	Markit US Manufacturing PMI	58.7	—	59.2	—
2/19/2021	Markit US Composite PMI	—	—	58.7	—
2/19/2021	Markit US Services PMI	58	—	58.3	—
2/19/2021	Existing Home Sales	6.60m	—	6.76m	—
2/19/2021	Existing Home Sales MoM	-2.40%	—	0.70%	—

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