Episode 485: The DC Today - Thursday October 6, 2022

A little market move down today – nothing to write home about. But more information on big picture you will want to listen to right here …

MARKET ACTION

Dow: -347 points (-1.15%) S&P: -1.02% Nasdaq: -0.68% 10-Year Treasury Yield: 3.83% (+7 basis points) Top-performing sector: Energy (+1.82%) – fourth day in a row Bottom-performing sector: Utilities (-3.30%) – second day in a row; rare and nasty WTI Crude Oil: $88.90/barrel (+1.26%) Key Economic Point of the Day:

Initial jobless claims came in at 219k, higher than the 203k expected (though continuing claims came in a tad less than expected) Mortgage rates at 16-year high … (6.75%)

ASK DAVID “Given the tight labor market and recognizing the number of people that left the workforce over the past 2+ years, is it reasonable to expect a decrease in unemployment numbers any time soon? If it’s not reasonable to expect a decrease in unemployment numbers, do you think the Fed should use this criteria as a benchmark for monetary policy?”

~ Ed D.

Unfortunately, I do believe unemployment will go higher, and I do believe it will be relevant to Fed policy. Technically their dual mandate includes full employment, so if they pursue a monetary policy that increases joblessness I believe they will reverse course. I don’t think it is the benchmark they say it is, but I do think right now it gives them cover in non-effective monetary tightening (if anyone still believes the Fed Funds rate is causing inflation I have a bridge to sell them, assuming I can get the parts and labor).

Links mentioned in this episode: TheDCToday.com TheBahnsenGroup.com