US economic data remains weak, Powell may take aggressive measures again👆
US data was much less friendly to the goldilocks narrative today, as a sharp -5.2% drop in durable goods orders was offset against stronger than expected initial claims (230k vs 240k last week), with bond yields rising around 3bp on the day despite the rough showing in equities today. Furthermore, Atlanta Fed's GDPNow was revised up even further to 5.9% for Q3, adding further hawkish pressures to Powell's Jackson Hole speech today, where he will be delivering a keynote on the topic of "Structural Shifts in the Global Economy". Both nominal and real (inflation adjusted) yields are going into the symposium at 90%-percentile highs going back to 2004. Last year's keynote was surprisingly brief, with Powell brutally explicit in trying to usher rates higher, leading to the infamous Q4 risk sell-off. Will the US economy still in decent shape, and inflation and labour markets only showing limited signs of softening despite rates at >5%, will the Chairman be looking for another Round 2 knock-out? Stay tuned!
