Federal Reserve Chairman Jerome Powell speaks during a news conference at the Federal Reserve’s William McChesney Martin Building on March 20, 2024 in Washington, DC.
Chip Somodevilla | Getty Images News | Getty Images
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What you need to know today
Production surges
The major changes in the market occurred in the bond market, where yields suddenly rose after the release of the closely watched March non-farm payrolls data. The 10-year Treasury yield rose 9 basis points to 4.4%, briefly touching a new high of 4.429% in 2024. The 2-year Treasury yield also rose 10.9 basis points to 4.75%. Yields and prices move in opposite directions.
Hot job reports
U.S. nonfarm payrolls data showed that new jobs were created in March easily exceeding market expectations. There was an increase of 303,000 people this month, well above the 200,000 increase expected by Dow Jones. The unemployment rate fell slightly to 3.8%, in line with expectations. After analyzing the data, many market watchers pointed to the bombshell report as another reason for the Fed to take its time after a series of policymakers began talking more conservatively about cutting interest rates this week.
Earthquake hits northeastern United States
While all this was happening in the market, a 4.8 magnitude earthquake struck the northeastern United States on Friday morning. Tremors were reportedly felt from Boston to Baltimore. In New York City, there were no immediate reports of injuries or damage, but it triggered multiple delays and temporary closures of transportation infrastructure.
(PRO) From Nvidia to Boeing
Fund manager Barbara Doran has revealed some of her favorite stocks and believes investors are reluctant to embrace the current bull market “after several years of deep skepticism”.Her top picks include top performers Nvidiathe embattled aerospace giant boeing company and more.
bottom line
It took a while, but after some serious thinking Friday’s jobs report showed the market thinks they like it, adding some momentum as the day progresses.
Signs that the U.S. economy is in good shape (and a possible boost to corporate profits) have managed to overcome concerns that the Fed might delay a rate cut due to inflationary pressures. This all comes after some hawkish comments from policymakers on Thursday spooked markets.
To be sure, the fed funds futures market is still pricing in expectations that the Fed will begin cutting interest rates in June, but there is little now. More than 50% chance.
There are two more non-farm payrolls reports ahead of June’s big meeting. As David Page, head of macro at AXA Investment Managers, said, this “is not the ultimate goal of the Fed’s expected easing cycle.” He also pointed out that three inflation reports will be released before this, one of which will be released next Wednesday.
But after a tumultuous week, there is now a real risk that the Fed could act later than June, and markets will remain on edge for months to come.
Correction: The headline and story have been updated to correctly reflect that the Fed may cut interest rates later than initially expected.