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Yield Curves Bear Steepen, Focus on Fed over Jobs Data

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Yield curves continued to bear steepen Friday, 2s10s session high of 43.067 back to early March levels as bond yields climbed to 3.2338% high -- last seen early December 2018. Relative calm end to the week for a NFP session.
  • Tsy futures bounced higher briefly, scaled back amid steady selling after Apr NFP jobs gained more than estimated +428k vs. +380k est, avg hourly earning little weaker than exp at 0.3% vs. 0.4% est. Total down-revisions to Feb-Mar -39k.
  • Fed out of blackout: limited react to essay published by Minneapolis Fed Pres Kashkari: Long-Term Real Rates Are Already Back To Neutral. ""If the economy is in fact in a higher-pressure equilibrium, that might indicate the neutral long-term real rate has increased, which would then require even higher rates to reach a contractionary stance that would bring the economy into balance."
  • MNI interview w/ Richmond Fed Barkin: interest rate increases are not on a preset course and he would like to see interest rates on a path to normal that is as fast as feasible, backing this week's historic FOMC decision to raise the fed funds rate 50bps, while not ruling out the potential for a supersized 75bp increase if needed.
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Yield curves continued to bear steepen Friday, 2s10s session high of 43.067 back to early March levels as bond yields climbed to 3.2338% high -- last seen early December 2018. Relative calm end to the week for a NFP session.
  • Tsy futures bounced higher briefly, scaled back amid steady selling after Apr NFP jobs gained more than estimated +428k vs. +380k est, avg hourly earning little weaker than exp at 0.3% vs. 0.4% est. Total down-revisions to Feb-Mar -39k.
  • Fed out of blackout: limited react to essay published by Minneapolis Fed Pres Kashkari: Long-Term Real Rates Are Already Back To Neutral. ""If the economy is in fact in a higher-pressure equilibrium, that might indicate the neutral long-term real rate has increased, which would then require even higher rates to reach a contractionary stance that would bring the economy into balance."
  • MNI interview w/ Richmond Fed Barkin: interest rate increases are not on a preset course and he would like to see interest rates on a path to normal that is as fast as feasible, backing this week's historic FOMC decision to raise the fed funds rate 50bps, while not ruling out the potential for a supersized 75bp increase if needed.