Baker Market Updates: Lunch with Lester

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Lunch with Lester - Week in Review is The Baker Group’s Friday newsletter that provides community bankers with an accurate recap of the week’s economic developments. Authored by our seasoned Associate Partner Lester Murray, this insightful publication tracks Federal Reserve policy and provides useful credit market updates including: Weekly Economic Calendar; Fed Fund Futures; Treasury Yield Curve; Agency Spreads; MBS Spreads; Municipal Spreads; MBS Prepayments; and FHLB Advance Rates. 

June 15, 2018

In a thinly veiled response to ABC’s recent cancellation of “Roseanne”, Fed Chairman Jerome Powell announced this week that he will be holding a press conference after each of the FOMC’s meetings rather than the traditional every-other-one schedule. Ratings will soar. The telegenic Mr. Powell indicated that interest rates, while perhaps not soaring, will still be gaining altitude. Read more.

June 8, 2018

Betting on sports is no longer against the rules, but swimsuits at the Miss America Pageant are. Things have a way of changing. It’s not much different with investors’ appetite for risk; that has a way of changing, too. Not much more than a week ago, the unpalatable Italian situation along with trade war concerns drove Ten-Year yields below 2.80%. Those fears proved to be short-lived as, in recent days, renewed risk consumption pushed that yield back to the 3% threshold. Read more.

June 1, 2018

One thing we’ve learned in recent days is that holiday-shortened weeks can be just as fun as the five-day variety. Tuesday morning (a substitute for Monday morning) brought angst and excitement in the form of a 500-point meltdown in stocks matched by a six-week low on the 10yr T-Note yield as it hit 2.78%. Read more.

May 25, 2018

Now boarding Group 1 for the next flight to quality; passengers are required to leave all baggage in the terminal. Overhead bin space is limited and is reserved for Treasury bonds only. However, passengers will be permitted to carry-on one personal item, as long as it has coupons attached. We’ve got a full flight today, so the quicker y’all can get in your seats; the quicker we can get away from all this risk. Read more.

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May 18, 2018

So, what do you think Jerome Powell hears; “yanni” or “laurel”? More importantly, to whom will he listen; James Bullard or Loretta Mester? The reason that might be important is because Mr. Bullard, President of the St. Louis Fed, and Mrs. Mester, President of the Cleveland Fed, are both on the Federal Open Market Committee and, as such, will both have Chairman Powell’s ear when the FOMC meets next month. Read more.

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May 11, 2018

Human nature being what it is, humans can sometimes go looking for problems where perhaps none exist. In last week’s Jobs Report from the Bureau of Labor Statistics (BLS) it might have seemed problematic that 6.3 million people were unemployed. Read more.

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May 4, 2018

Figures don’t lie, we’ve all been told, and this morning’s figures from the Bureau of Labor Statistics (BLS) tell us that the nation’s Unemployment Rate fell by two-tenths last month to 3.9%. In technical terms, that’s pretty low. One might think that a flood of new jobs must have been created in order to bring the rate down that much in just one month. Read more.

April 27, 2018

The doctrine of relativism and the belief that there are no absolute truths seldom make their way into economic discussions, but maybe they should. Absolutely. Otherwise, we might not be able to feel good about this morning’s report that GDP grew at 2.3% in the first quarter and, of course, we want to feel good. Read more. 

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April 20, 2018

The Federal Reserve released the latest edition of its Beige Book this week and the good news is, it still goes with everything. Beige is the new black. The near-universal sentiment from all twelve Fed districts was that import tariffs do not go well with much of anything, and never will. Read more. 

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April 13, 2018

Treasuries yields and equities alike drifted up this week volatility continued to decline from the mid-February run-up. Yields across the curve are up modestly (2Yr 2.36%, 10Yr 2.82%) and the 10s-2s spread remains tight around 50bps. Read more.

April 6, 2018

If this week’s wild market gyrations are any indication, investors worldwide still don’t quite know how to react to the unlikely popularity of an American television show that seems to editorially support the Administration. Read more.

Listen to this week's Baker Market Update Podcast.