{"id":487159,"date":"2022-08-23T21:05:00","date_gmt":"2022-08-23T18:05:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/market-extra-disappointing-u-s-data-has-bond-traders-considering-possible-half-point-fed-rate-hike-in-september\/"},"modified":"2022-08-23T21:05:00","modified_gmt":"2022-08-23T18:05:00","slug":"market-extra-disappointing-u-s-data-has-bond-traders-considering-possible-half-point-fed-rate-hike-in-september","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/market-extra-disappointing-u-s-data-has-bond-traders-considering-possible-half-point-fed-rate-hike-in-september\/","title":{"rendered":"#Market Extra: Disappointing U.S. data has bond traders considering possible half-point Fed rate hike in September"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3584ba6faba\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3584ba6faba\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/market-extra-disappointing-u-s-data-has-bond-traders-considering-possible-half-point-fed-rate-hike-in-september\/#%E2%80%9CMarket_Extra_Disappointing_US_data_has_bond_traders_considering_possible_half-point_Fed_rate_hike_in_September%E2%80%9D\" >&#8220;Market Extra: Disappointing U.S. data has bond traders considering possible half-point Fed rate hike in September&#8221;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/market-extra-disappointing-u-s-data-has-bond-traders-considering-possible-half-point-fed-rate-hike-in-september\/#Vivien_Lou_Chen\" >Vivien Lou Chen<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CMarket_Extra_Disappointing_US_data_has_bond_traders_considering_possible_half-point_Fed_rate_hike_in_September%E2%80%9D\"><\/span>&#8220;Market Extra: Disappointing U.S. data has bond traders considering possible half-point Fed rate hike in September&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\">\n<\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap crawler\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0001131993\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0001131993\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       In the blink of an eye on Tuesday, the U.S. bond market\u2019s focus shifted back toward fears of an unexpectedly sharp economic slowdown and away for now from persistently high inflation.<\/p>\n<p>That sentiment shift occurred after data showed U.S. new home sales plunged in July to the lowest level in more than six years. Gauges of the manufacturing and service sectors also came in below expectations, reinforcing similar weakness seen in the eurozone.  On Tuesday, traders priced in a better-than-not chance of a 50-basis-point interest rate hike by Federal Reserve policy makers in September, which would lift the fed funds rate target to between 2.75% and 3%, pulling back from Monday\u2019s expectations for a bigger 75-basis-point hike next month. <\/p>\n<p>Financial markets have been caught between two narratives \u2014 one of troublingly elevated inflation that forces policy makers to keep aggressively raising borrowing costs, the other of an economic slowdown that resolves the inflation problem and prompts the Fed to pivot. Both of these narratives could add up anyway to something that looks and feels like the worst of all worlds: stagflation. <\/p>\n<p>\u201cThe data is weakening and the market is considering a Fed pivot\u201d in the form of a half-point hike in September, said trader Tom di Galoma of Seaport Global Holdings in Greenwich, Connecticut.\u00a0\u201cI don\u2019t see a pivot,\u00a0but the market is starting to see one.\u201d<\/p>\n<p>\u201cWe\u2019re starting to go into a real slowdown in the housing market, which overall is not good for the economy just because that market fuels so much of the expenditures that were taking place,\u201d he said via phone om Tuesday. \u201cBut my impression is that the Fed will want to get rates as high as it can before a full slowdown takes place around October. The Fed was going to hike into a slowing economy anyway, but when the numbers become real, people get nervous.\u201d <\/p>\n<p> On Tuesday, U.S. yields fell across the board after the dis<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ointing report on July\u2019s new-home sales, led by the 2-year<br \/>\n        TMUBMUSD02Y,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.000%\" channel=\"\" class=\"\">3.293%<\/bg-quote><span>,<\/span><br \/>\n       which captures the expected path of the Fed\u2019s rate policy. The 10-year yield<br \/>\n        TMUBMUSD10Y,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.000%\" channel=\"\" class=\"\">3.038%<\/bg-quote><br \/>\n       dropped below 3% during morning trading, while its spread to the 2-year narrowed to minus 26 basis points in a still-worrisome sign of the outlook ahead of Friday\u2019s speech by Fed Chairman Jerome Powell at the central bank\u2019s symposium in Jackson Hole, Wyo.<\/p>\n<p>U.S. stocks struggled to regain their footing through afternoon trading, a day after posting their worst day since June on fears that the Fed would move forward with sharply higher interest rates. The Dow industrials <a rel=\"nofollow noopener\" target=\"_blank\" href=\"#phrase-company?ref=COMPANY%7CDJIA;onlineSignificance=prominent\" class=\"icon none\">DJIA<\/a> were down 95 points, or 0.3%, in afternoon trading, while the S&amp;P 500 <a rel=\"nofollow noopener\" target=\"_blank\" href=\"#phrase-company?ref=COMPANY%7CSPX;onlineSignificance=prominent\" class=\"icon none\">SPX<\/a> was little changed and the Nasdaq Composite <a rel=\"nofollow noopener\" target=\"_blank\" href=\"#phrase-company?ref=COMPANY%7CCOMP;onlineSignificance=prominent\" class=\"icon none\">COMP<\/a> was higher by 0.3%. Meanwhile, the ICE U.S. Dollar Index <a rel=\"nofollow noopener\" target=\"_blank\" href=\"#phrase-company?ref=COMPANY%7CDXY;onlineSignificance=prominent\" class=\"icon none\">DXY<\/a> was down 0.5%, retracing most of Monday\u2019s advance.<\/p>\n<p>\u201cSofter U.S. data took the edge off Jackson Hole panic this morning, yet markets still prep for a worst case outcome this Friday,\u201d said Jim Vogel, executive vice president at FHN Financial in Memphis. \u201cJust don\u2019t ask anyone to articulate what that worst case might look like. It simply could be bad.\u201d<\/p>\n<p>\u201cThe Fed has moved into a data dependent phase \u2014 increasing chances Chair Powell hedges even the most hawkish message by a smidge,\u201d Vogel wrote in a note.<\/p>\n<p>For Jay Hatfield, chief investment officer of Infrastructure Capital Advisors in New York, which oversees around $1.18 billion in assets, the \u201creal story\u201d behind Tuesday\u2019s bond-market moves is that \u201cU.S. bonds outperformed the rest of the world.\u201d <\/p>\n<p>The reason that the U.S. bond market had sold off on Friday was because the global bond market \u201cwas cracking,\u201d according to Hatfield. <strong>Germany printed\u00a0<\/strong>a 5.3% month-over-month gain in producer prices and an \u201cunimaginable\u201d year-over-year gain of more than 30%, while natural-gas prices in some parts of Europe have hit the energy equivalent of $500 a barrel, stoking fears that the European Central Bank will be \u201cmore aggressive.\u201d<\/p>\n<p>But as of Tuesday, a 3% level on the U.S.10-year yield was finding interest from both buyers and sellers, and staying \u201cpretty well-anchored,\u201d Hatfield said via phone, adding that he expects the Fed to lift rates by 50 basis points in September.<\/p>\n<p>\u201cYou can\u2019t look at U.S. rates in a vacuum and U.S. bonds are by far the most attractive in the world,\u201d he said. Meanwhile, a short-term Treasury yield trading above longer-term rates is \u201cpricing in stagflation.\u201d  <\/p>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Vivien Lou Chen\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/author\/vivien-lou-chen\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/vivienlouchen\",\"text\":\"@vivienlouchen\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Vivien_Lou_Chen\"><\/span>Vivien Lou Chen<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><ufc-follow-author-widget product=\"marketwatch\" author-id=\"250_MW\" author-name=\"Vivien Lou Chen\" signin-url=\"https:\/\/accounts.marketwatch.com\/login?target=https%3A%2F%2Fwww.marketwatch.com%2Fstory%2Fdisappointing-u-s-data-has-bond-traders-considering-possible-half-point-fed-rate-hike-in-september-11661277926%3Frss%3D1%26siteid%3Drss\" panda-api=\"https:\/\/follow-api.marketwatch.com\"><\/ufc-follow-author-widget><\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C06575-04D4-B545-7114-5D91FFE04FA9%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Market Extra: Disappointing U.S. data has bond traders considering possible half-point Fed rate hike in September&#8221; In the blink of an eye on Tuesday, the U.S. bond market\u2019s focus shifted back toward fears of an unexpectedly sharp economic slowdown and away for now from persistently high inflation. That sentiment shift occurred after data showed U.S&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":487160,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-609068\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-487159","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/487159","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=487159"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/487159\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/487160"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=487159"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=487159"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=487159"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}