All is relatively quiet ahead of tomorrow’s jobs report. Treasuries are continuing the recent trend, with yields down 2-4 basis points to start the day. In an interview with Bloomberg TV yesterday, House Speaker Kevin McCarthy suggested that financial markets should be worried about the debt ceiling impasse. He said that House Republicans were “never going to move a bill that just raises the debt ceiling” without some spending cuts. St. Louis Fed President Bullard will speaking on the economy and monetary policy later this morning at an event in Little Rock. A preferred recession gauge for Fed Chair Powell has been the spread between the current 3-month Treasury bill yield and the 18-month forward 3-month T-bill yield. Generally speaking, the more inverted the spread, the greater the recession signal. That spread is now at -170 basis points, 64 basis points lower than the previous record (December 2000) going back to 1995.
Jason Haley
Chief Investment Officer
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