The day after the big Fed rate announcement has been relatively uneventful in the markets, despite quite a few economic reports released today. GDP final revision for Q2 at 4.2%, durable goods well above expectations, and jobless claims very close to expectations. The bond market will happily accept uneventful, especially due to the fact that Fed chairman Powells comments have been digested overnight and they are not selling off and pushing mortgage rates higher. His “no surprises in inflation” comments couldn’t have come at a better time, and just might help turn bonds around from the relatively steep and definitive fall which caused the climb in rates over the last 30 days.
While a few days dos not constitute a new trend, every day this level holds makes for a higher probability of change. We will maintain a cautious floating bias.