New unemployment claims fall to 239,000

Aug. 17:

Weekly initial jobless claims fell to 239,000 last week from 250,000 the prior week. The four-week moving average is now 234,250. 

Philadelphia Fed forecasts regional manufacturing expansion  

The Philadelphia Fed Manufacturing Business Outlook index was 12.0 in August. It’s the first time the index has been positive since last August. Any positive number indicates an outlook for growth in manufacturing in the region monitored by the Philadelphia Fed, while any negative number signals an outlook for contraction.

State of the market

Treasury yields were up this morning in response to those two positive economic reports and the minutes from the Federal Open Market Committee meeting that concluded July 26. Published yesterday, the minutes revealed members’ concern over a continuing risk of inflation. That could lead to another rate hike but, perhaps more significantly, it might require the Federal Reserve to keep the target rate at higher levels for longer than had been anticipated.

The upper end of the target range currently sits at 5.50%. Futures and swaps indicate we could be at about that level through the end of this year, down to 4.50% at the end of 2024, and maybe at 4.00% by the end of 2025.

The Dow traded up this morning.

Treasury calendar

There are no auctions of Treasury notes or bonds this week.

By Mike Kraft, Executive Director and Commercial Real Estate Treasurer for Commercial Banking