November 2, 2022 Headlines

 FOMC day has arrived. Treasuries and equity futures are little changed so far ahead of today’s announcement, which is expected to bring a fourth consecutive 75 basis point rate hike. The bigger area of speculation is how, if at all, the Fed will alter its forward guidance, including any discussion of a slowdown in the pace of hikes at future meetings. We expect Powell and Co. to be very careful to not open the door for any dovish conclusions by market participants, particularly after the upside surprise in September job openings yesterday. That said, today’s hike would get the funds rate much closer to the terminal rate of 4.50% to 5% conveyed by most Fed leaders in recent weeks/months, including the September dot plot. As such, the FOMC would need to slow the pace of hikes unless it wants to hit that terminal rate by year end. Powell could open the door for this moderation as early as the December meeting while still making clear that the outlook remains uncertain and that any such decision would remain data dependent.  With another 75 bp hike today, it would mark 375 bps of rate hikes in less than eight months.

Jason Haley
Chief Investment Officer

11/2/2022MBA Mortgage Applications-0.50%-1.70%
11/2/2022ADP Employment Change185k239k208k192k
11/2/2022FOMC Rate Decision (Lower Bound)3.75%3.00%
11/2/2022FOMC Rate Decision (Upper Bound)4.00%3.25%
11/2/2022Interest on Reserve Balances Rate3.90%3.15%
11/3/2022Challenger Job Cuts YoY67.60%
11/3/2022Trade Balance-$72.3b-$67.4b
11/3/2022Nonfarm Productivity0.50%-4.10%
11/3/2022Unit Labor Costs4.00%10.20%
11/3/2022Initial Jobless Claims220k217k
11/3/2022Continuing Claims1450k1438k
11/3/2022S&P Global US Services PMI46.646.6
11/3/2022S&P Global US Composite PMI47.347.3
11/3/2022Factory Orders0.30%0.00%
11/3/2022Factory Orders Ex Trans0.20%
11/3/2022Durable Goods Orders0.40%0.40%
11/3/2022Durables Ex Transportation-0.50%-0.50%
11/3/2022Cap Goods Orders Nondef Ex Air-0.70%
11/3/2022ISM Services Index55.356.7
11/3/2022Cap Goods Ship Nondef Ex Air-0.50%
11/4/2022Two-Month Payroll Net Revision11k
11/4/2022Change in Nonfarm Payrolls196k263k
11/4/2022Change in Private Payrolls200k288k
11/4/2022Change in Manufact. Payrolls14k22k
11/4/2022Unemployment Rate3.60%3.50%
11/4/2022Average Hourly Earnings MoM0.30%0.30%
11/4/2022Average Hourly Earnings YoY4.70%5.00%
11/4/2022Average Weekly Hours All Employees34.534.5
11/4/2022Labor Force Participation Rate62.30%62.30%
11/4/2022Underemployment Rate6.70%
11/7/2022Consumer Credit$33.000b$32.241b
11/8/2022NFIB Small Business Optimism92.1
11/9/2022MBA Mortgage Applications-0.50%
11/9/2022Wholesale Trade Sales MoM0.10%
11/9/2022Wholesale Inventories MoM0.90%0.80%


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