Overview: Thu, September 21

Daily Agenda

Time Indicator/Event Comment
08:30Phila. Fed mfg surveyLittle change from moderately strong August level
08:30Jobless claimsFirst wave of Iris filings may boost claims this week
09:00FHFA house price indexSmall increase expected in July
10:00Leading indicatorsExpect a 0.6% rise in August
11:003- and 6-month bill announcementLikely steady at current levels
11:002-, 5-, 7-yr, and 2-yr FRN (r) note announcementNo changes expected
13:0010-yr TIPS (r) auction$11 billion offering

US Economy

  • Economic Indicator Preview for Thursday, September 21, 2017

    Initial jobless claims may move above 300K in this week’s report, reflecting the first batch of Irma-related filings as well as additional claims arising from Hurricane Harvey.   The Philadelphia Fed factory data may be roughly unchanged from last month’s moderately strong level, while the FHFA house price index could struggle to extend its long string of monthly increases in the July report.

Federal Reserve and the Overnight Market

  • Fed Highlights for Thursday, September 21, 2017

    Chair Yellen yesterday gave the market no reason to believe that the FOMC had lost confidence in its view that a third 2017 rate hike would be appropriate by December.  We had thought that the Fed would be more reluctant to dismiss the recent softness in the inflation data, but the tone of yesterday’s press conference suggests that the bar for a December rate hike is not particularly high.

Treasury Finance

This Week's MMO

  • MMO for September 18, 2017

    It is a foregone conclusion that the Fed will leave rates on hold but announce the beginning of its balance sheet runoff at this week’s FOMC meeting.  The big question is how the Fed will frame the debate over the possibility of a third rate hike in December.  We assume that Chair Yellen will want to keep her options open at this point.  As long as the Fed does nothing to take a rate hike off the table this week, the market in the near term may continue to bump up the implied odds of another move by year-end.

Federal Reserve Commentary

MMO Analysis