June 17, 2021 Headlines

The market’s assessment of a more hawkish Fed sent intermediate Treasury yields 10-12 basis points higher yesterday afternoon. Better buying overnight is contributing to slightly lower and flatter yields this morning. There were two headlines from yesterday’s FOMC meeting. First and foremost, the updated Summary of Economic Projections (SEP) now show 50 bps of rate hikes in 2023 based on the median participant forecast, and seven participants now expect a rate hike next year, up from four at the March meeting. This was the primary driver of more outsized move in belly (intermediate) yields. Not surprisingly, Fed Chair Powell attempted to pour cold water on the importance of the hawkish “dots” shift, but the market, at least yesterday afternoon, wasn’t hearing it. On the topic of asset purchases, Powell acknowledged that the committee is now at least talking about the future pace of purchases.

The second headline was the small surprise related to the IOER and reverse repo rates. To relieve pressures in the money markets, the Fed chose to make a technical adjustment to its administered rates, raising both by 5 bps. This has been discussed by the committee for the last few months, but it was less certain as to whether it would be done yesterday.

Jason Haley
Chief Investment Officer

06/15/21Retail Sales Advance MoM-0.80%-1.30%0.00%0.90%
06/15/21Retail Sales Ex Auto MoM0.40%-0.70%-0.80%0.00%
06/15/21Retail Sales Ex Auto and Gas0.00%-0.80%-0.80%0.10%
06/15/21Retail Sales Control Group-0.50%-0.70%-1.50%-0.40%
06/15/21Empire Manufacturing22.717.424.3
06/15/21PPI Final Demand MoM0.50%0.80%0.60%
06/15/21PPI Ex Food and Energy MoM0.50%0.70%0.70%
06/15/21PPI Ex Food, Energy, Trade MoM0.50%0.70%0.70%
06/15/21PPI Final Demand YoY6.20%6.60%6.20%
06/15/21PPI Ex Food and Energy YoY4.80%4.80%4.10%
06/15/21PPI Ex Food, Energy, Trade YoY5.10%5.30%4.60%
06/15/21Capacity Utilization75.10%75.20%74.90%74.60%
06/15/21Industrial Production MoM0.70%0.80%0.70%0.10%
06/15/21Manufacturing (SIC) Production0.80%0.90%0.40%-0.10%
06/15/21Business Inventories-0.10%-0.20%0.30%0.20%
06/15/21NAHB Housing Market Index838183
06/15/21Total Net TIC Flows$101.2b$146.4b$146.7b
06/15/21Net Long-term TIC Flows$100.7b$262.2b$262.4b
06/16/21MBA Mortgage Applications4.20%-3.10%
06/16/21Housing Starts1630k1572k1569k1517k
06/16/21Housing Starts MoM3.90%3.60%-9.50%-12.10%
06/16/21Building Permits1730k1681k1760k1733k
06/16/21Building Permits MoM-0.20%-3.00%0.30%-1.30%
06/16/21Import Price Index MoM0.80%1.10%0.70%0.80%
06/16/21Import Price Index ex Petroleum MoM0.50%0.90%0.70%
06/16/21Import Price Index YoY10.90%11.30%10.60%10.80%
06/16/21Export Price Index MoM0.80%2.20%0.80%1.10%
06/16/21Export Price Index YoY15.20%17.40%14.40%14.90%
06/16/21FOMC Rate Decision (Lower Bound)0.00%0.00%0.00%
06/16/21FOMC Rate Decision (Upper Bound)0.25%0.25%0.25%
06/16/21Interest Rate on Excess Reserves0.10%0.15%0.10%
06/17/21Philadelphia Fed Business Outlook3130.731.5
06/17/21Initial Jobless Claims360k412k376k375k
06/17/21Continuing Claims3425k3518k3499k3517k
06/17/21Langer Consumer Comfort55.4
06/17/21Leading Index1.30%1.60%

Subscribe Today!

Subscribe to our email list and get the latest articles and announcements from ALM First.

Recent Articles

ALM First offers investment advisory services through ALM First Financial Advisors, LLC, which is registered with the U.S. Securities and Exchange Commission (“SEC”). SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the firm has attained a particular level of skill or ability. The information contained herein does not constitute investment advice or a recommendation for you to purchase or sell any specific security. You are solely responsible for reviewing the content and for any actions you take or choose not to take based on your review of such content.Information contained herein was derived from third party sources as indicated. While such information is believed to be reliable, no representation or warranty is made concerning the accuracy of any information presented. We have not and will not independently verify this information. Where such sources include opinions and projections, such opinions and projections should be ascribed only to the applicable third party source and not to ALM First.Statements herein that reflect projections or expectations of future financial or economic performance are forward-looking statements. Such “forward-looking” statements are based on various assumptions, which assumptions may not prove to be correct. Accordingly, there can be no assurance that such assumptions and statements will accurately predict future events or actual performance. No representation or warranty can be given that the estimates, opinions or assumptions made herein will prove to be accurate. Any projections and forward-looking statements included herein should be considered speculative and are qualified in their entirety by the information and risks disclosed in the confidential offering document. Actual results for any period may or may not approximate such forward-looking statements. No representations or warranties whatsoever are made by ALM First Financial Advisors, LLC or any other person or entity as to the future profitability of investments recommended by ALM First Financial Advisors, LLC.