Both the stock and bond markets are relatively flat today, as Weekly Unemployment Claims came in at 1.5 million. This staggering number shows that the job market is not improving at the pace many anticipated. Of course, once the additional $600 per week additional pay that the Federal Government is offering to unemployed workers expires, many will then decide to return to their jobs. This is what happens when upwards of 70% of the unemployed labor force is making more money receiving government subsidies than they did when they were working.
Fed Chairman Jerome Powell reiterated the need for the Fed to “Keep the foot on the Gas until we are through this,” giving bond holders comfort in allowing market driven interest rates to remain low. With the Fed’s support, it seems that stock losses will be minimized and mortgage interest rates will remain low. For the first time, it seems that market damage through a recession will be controlled. This is good news for wealthy individuals, as well as those who want to take advantage of historically low mortgage interest rates.
The potential improvements to rates seem minimal. Float only if you are able to closely watch the markets.