The dollar and U.S. Treasury yields have reached highs not seen in over a month, driven by the ongoing resilience of the American economy, as evidenced by the release of generally better-than-expected data. The U.S. Dollar Index (DXY), which measures the greenback’s performance against a basket of major currencies, edged slightly higher to approach 103.52 on Thursday. The yield on a 10-year Treasury Note, whose performance is tracked by the U.S. Treasury Note ETF (NYSE:UTEN), briefly reached 4.13%, hitting its highest levels since Dec. 13. Market-implied probabilities of a rate cut by the Federal Reserve in March hovered at around 55%, according to CME Group’s FedWatch Tool, equalling to 13 basis points priced in. Market rate cut expectations are slightly up from Wednesday’s 50%, but significantly lower than the 73% seen a week ago. Here are the key economic data points moving the markets on Thursday: Jobless Claims Fall More Than Expected During the week ending Jan. 18, the number of Americans applying for unemployment benefits saw a substantial decrease of 16,000, reaching 187,000. This figure represents the lowest level since September 2022, and it significantly came below market expectations of 207,000, as per data reported by the Labor Department. Furthermore, continuing claims ...Full story available on Benzinga.com

In a recent interview with CNBC, top Wall Street analyst Jim Bianco projected the 10-year Treasury yield to rise up to 5.5% in 2024, reaching the highest level since May 2001. The president and macro strategist of Bianco Research, expected a more hawkish Fed approach and an unexpectedly resilient economy this year. Decoding Fed’s Minutes And Economic Outlook Bianco’s analysis of the recent Federal Reserve minutes revealed a less aggressive stance on rate cuts than many anticipated. “The minutes came in a little bit more hawkish … suggesting that the Fed might be a little, if I could use the word, stickier, in cutting rates,” he explained. Bianco also raised concerns about inflation, projecting it to stabilize around 3%, notably above the Fed’s 2% target. He underscored the urgency with which the Fed was tackling inflation, emphasizing that even a 3% rate was too high for their comfort. Bianco saw an economy that defies the common narrative of a “soft landing.” He confidently stated, “I don’t think we’re having a soft landing … the economy is doing what it does 90% of the time. It is continuing to expand.” He argued the current economic expansion could comfortably withstand higher interest rates. Bianco expected a scenario where ...Full story available on Benzinga.com

In an exclusive interview with the Financial Times, a senior Federal Reserve official has sounded a note of caution, warning that financial markets might be getting ahead of themselves in anticipating early interest rate cuts in the coming year. What Happened: Loretta Mester, the President of the Cleveland Fed, has pushed back on the prevailing market sentiment, suggesting that the central bank might not be in a hurry to reduce borrowing costs. Mester’s statements echo the sentiments expressed recently by two other Federal Reserve Open Market Commitee (FOMC) voting members for 2024, namely John Williams of the New York Fed and Atlanta’s Raphael Bostic. The Fed’s December “dot plot” provided a median preference for the federal funds rate at the close of 2024 at 4.6%, implying a reduction of 75 basis points from present levels. Further projections indicate rates of 3.6% in 2025 and 2.9% in 2026. Mester, who is set to retire in June after a decade at the helm of the Cleveland ...Full story available on Benzinga.com

It has been 27 days since the tragic events of Oct. 7 when the Palestinian terrorist group of Hamas conducted a series of deadly attacks in Israel and abducted 240 hostages who are still held in Gaza, triggering military responses from Tel Aviv’s army. Here are the most recent developments in this ongoing conflict: The primary generator supplying power to the Gaza Indonesian Hospital experienced a failure on Wednesday night, as stated by Dr. Atef Al Kahlout, the director of Gaza’s Indonesian Hospital, to CNN on Thursday. The UN Human Rights Office has raised concerns that Israel’s attacks on Jabalya, Gaza’s largest refugee camp, may potentially constitute war crimes due to the significant number of civilian casualties and extensive destruction. #Gaza – Given the high number of civilian casualties & the scale of destruction following Israeli airstrikes on Jabalia refugee camp, we have serious concerns that these are disproportionate attacks that could amount to war crimes. pic.twitter.com/ky2jYVrhJq — UN Human Rights (@UNHumanRights) November 1, 2023 In Gaza City, Israeli airstrikes also targeted the vicinity of Al Quds hospital, where thousands of displaced individuals have sought shelter, according to the hospital’s director, who spoke to CNN on Thursday. On Thursday, six ...Full story available on Benzinga.com

The Federal Open Market Committee’s two-day meeting is commencing Tuesday and is set to conclude on Wednesday, with the Federal Reserve publishing its policy statement and Fed Chair Jerome Powell hosting an eagerly awaited press conference. The prevailing market sentiment firmly expects that interest rates will hold steady within the 5.25% to 5.5% range. According to CME Group’s FedWatch tool, there is an astonishing 99.6% likelihood that rates will remain unchanged. As we look forward to December, market participants exhibit somewhat reduced confidence, yet they still assign a robust 75% probability to the Federal Reserve maintaining its policy stance. With Wall Street largely expecting the Fed will keep rates steady, one distinct voice stands out. Read also: Will Treasury’s Upcoming Monster Borrowing Plans Outshine Fed’s Interest Rate ...Full story available on Benzinga.com

Traders are gearing up for the two-day Federal Open Market Committee meeting set to commence on Tuesday and conclude with a critical interest rate decision and highly anticipated press conference by Federal Reserve Chair Jerome Powell on Wednesday. Market sentiment is leaning heavily toward the belief the current interest rate of 5.25%-5.5% will remain untouched. CME Group’s FedWatch tool is showing a staggering 98% probability of rates staying on hold. Looking ahead to December, market participants are slightly less confident, but still assign a robust 75% probability to the Fed maintaining the status quo. Goldman Sachs Sees No Hikes Going Forward, Rising Focus On ‘Insurance Cuts’ A rate hike is not on the agenda for the November Fed meeting, according to Goldman Sachs economist David Mericle. The FOMC ...Full story available on Benzinga.com

Risk sentiment weakened during Wednesday trading on Wall Street, following significant gains in the previous session. This shift was triggered by higher-than-expected producer inflation, reigniting concerns ahead of the crucial consumer inflation report scheduled for Thursday. Traders were also eagerly anticipating the release of the Federal Reserve Open Market Committee meeting minutes at 2 p.m. ET, hoping for more clarity regarding the positions held by committee members. Recent statements from Fed officials have generally hinted at a more dovish stance, suggesting a potential pause in the ongoing interest rate hike campaign. Yet Michelle Bowman‘s remarks on Wednesday hinted at the possibility of additional rate hikes to combat inflation. In the Middle East, the geopolitical landscape has grown increasingly complex, with Israel making preparations for a siege of Gaza, while Iran, Lebanon and Syria have condemned the actions of the Israeli Defense Forces. The bond market experienced a rally following weeks of rising yields. The 10-year Treasury, as tracked by the US Treasury Note ETF (NYSE:UTEN), rose by 0.6% during the session, as yields saw a 7-basis point drop to 4.58%. The 30-year Treasury, closely monitored through the iShares 20+ Year Treasury ETF (NASDAQ:TLT), surged by 1.8% in the session, resulting ...Full story available on Benzinga.com

The IMF’s latest World Economic Outlook paints a promising picture of the U.S. economy, with strong growth and a stable job market, indicating the rising likelihood of a “soft landing” scenario whereby inflation declines in line with a muted output slowdown. However, the IMF’s flagship report also sounds a cautionary note regarding U.S. fiscal policy and rising government debt. US Growth Upwardly Revised: The Washington-based institution highlights that the United States has experienced the most substantial recovery among major economies, with its GDP in 2023 expected to surpass pre-pandemic levels. According to the IMF’s updated projections, U.S. economic growth for 2023 is now estimated at 2.1%, a notable increase of 0.3 percentage points compared to previous July estimates. Furthermore, the IMF expects a growth rate of 1.5% for 2024, up 0.5 of a percentage point from previous forecasts. In other parts of the world, growth projections have taken a downturn, further highlighting the exceptional economic performance of the U.S. Notably, the euro area’s growth forecast has been revised downward by 0.2 percentage points to 0.7% in 2023 and by 0.3 percentage ...Full story available on Benzinga.com

The Personal Consumption Expenditure (PCE) Price Index report for August — the Fed’s preferred inflation gauge — released Friday delivered mixed results, keeping investors on edge over the future of Fed’s decisions on interest rates. August PCE Inflation Report: Key Highlights The headline PCE price index increased from an upwardly revised 3.4% in July to 3.5% year-on-year in August 2023, matching the expected 3.5% and marking the second consecutive monthly rise. The month-over-month change in the PCE price index was 0.4%, a notable jump from July’s 0.2% increase but below the expected 0.5%. Excluding ...Full story available on Benzinga.com

The 10-year Treasury closed Tuesday at 4.37% yield, marking its highest level since Nov. 7, 2007 as investors brace for the upcoming Federal Reserve Open Market Committee (FOMC) rate announcement on Wednesday. September is poised to potentially become the fifth consecutive month of yield increases for the 10-year Treasury, a pattern not seen since late 2021 and the early part of 2022. This month alone, the yield has jumped by 25 basis points, marking the biggest uptick since February 2023. In comparison to its 50-day moving average, the 10-year yield currently stands 26 basis points higher, while there’s a 60 basis point positive gap from the 200-day moving ...Full story available on Benzinga.com