Post-NFP/Pre-CPI Thoughts: The MUFG Global Markets Podcast

In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves reviews the market price action post the strong July NFP report and what to look out for in the upcoming CPI report. At a minimum, the latest NFP report has made market participants put the “Fed pivot” concept on the backburner as the ongoing robust job growth, along with higher wage inflation, suggests that the Fed will have to lean harder to tightening monetary conditions to weaken aggregate demand.

Meanwhile, George believes that markets will start to focus more on core inflation versus headline, which historically has been more volatile. Lastly, markets remain on edge, but once we get past this week’s CPI report and bond supply, it’s possible that the summer lull sets in with rates grinding out to potentially slightly lower rates. However, George suggests that investors should stay focused and expect an active market once activity picks up in September.  

Disclaimer: www.mufgresearch.com (PDF)