The Fed says they will raise rates soon. Recent data shows a mixed bag of data. Inflationary pressures seem to be ebbing, and the real estate market not as robust. This Friday we receive the May jobs report. If it is below expectations, I say that the Fed may put itself on hold. If they do raise rates it will be to give themselves wiggle room if a rate cut becomes necessary. Today's data showed home sales declining for a second month and the first year over year loss since 2014. Chicago PMI rose, another mixed bag day.
Today was the last trading day of May. The Dow gained 57 points this month. Today they lost as bank stocks got clobbered on the prospect that the Fed won't raise more than once again this year. Lower rates mean’s lower profits. While, Nasdaq saw new record highs again this month.
The 10- bond yields closed today at 2.20%, which is a five week low as rate hike hopes also faded. The Fed's Beige Book today said that the economy was growing modestly. We need a lot more to get the economy to a 3% growth rate!
Oil had a modest gain this month and the Dollar is weaker. Mortgages continue to mostly tread water. Tomorrow's ADP report and the big jobs number may move rates. Yet, the direction is unclear…talk about a way to begin June!