Economic Update - Small Businesses and the Next Rate Hike
Stocks are a bit flat today after mixed day on Monday.
Yesterday Fed officials Daly and Bostic both said that the benchmark rate would need to be raised above 5% and remain there for some time. Fed Chair Jerome Powell’s speech at a panel in Sweden this morning gave no futher indication on the future movement of rates.
Analysts believe that the consumer price report this Thursday could influence whether the Fed increases by 25 or 50 basis points at the next meeting.
For economic data today, the NFIB Small-Business Optimism Index fell to 89.8 in Dec, the lowest level since June. The index was expected to inch higher to 92.0. The share of owners who expected better business conditions over the next 6 months decreased, while inflation remained the biggest concern amongst business owners.
Treasury yields are higher, with the 2-year T yield up 4.8 basis points to 4.25%, the 5-year T yield up 5.2 basis points to 3.70%, and the 10-year T yield up 6.1 basis points to 3.58%. The short-term advance rates are higher today, while the rest of the curve is flat or slightly lower.