The stock market fell on Friday after a large-scale sell-off in the previous one session.
Longer bets are moving up. Yields on 10-year Treasury bonds rose 5 basis points to 3.12%.
“What’s dangerous about yesterday’s huge market crash is that there must be an element of doubt about the ability of an effective Fed Put in this cycle after a 30-40-year period when the central bank could almost always come to the market’s aid,” he said. Jim Reid of Deutsche Bank.
“I can’t help but think that much of yesterday’s response was an appreciation that, although the Fed can make reassuring statements, they start with an extremely difficult starting point and with limited flexibility to respond to market or economic challenges while they fight inflation ».
Wages are non-agricultural food grew more than expected in April, and wage inflation eased, but labor force participation stopped its upward trend, declining slightly.
“It is unclear at this time whether the slowdown in wage growth is a temporary blow caused by the war in Ukraine and a concomitant jump in energy prices, or an inevitable consequence of the resumption of employment in most of the collapse caused by the pandemic, or a more alarming decline in transmission conditions, ”said Ian Sheperdson of Pantheon Macro. “We think the latter is unlikely, it’s too early.”
“Chairman Powell was very clear on Wednesday that the Fed now intends to increase by 50 bp in both June and July, but if wage figures continue to signal a significant slowdown, we believe July 50 is not Keep in mind that inflation will also fall sharply over the next three months, and we expect the housing market downturn to be undisputed in the data by then. “
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