Irony of Ironies: Powell Testifies About Growing Uncertainties, While Recent Economic Data Come in Stronger-than-Expected

As it turned out, the drop in Weekly Jobless Claims to 209,000 from 223,000 was more than expected (a bullish economic data point) coupled with stronger-than-expected Core CPI (2.1% Y-O-Y) "surprised" the bond market-- and might surprise Fed Chair Powell too-- which lifted 10 year YIELD to 2.08% from 2.06%.

Let's notice on my attached YIELD chart that in the past week, 10 year YIELD has climbed from 1.94% to 2.08%, ironically as pressure to cut rates has ratcheted up on-- and apparently has been embraced by-- Fed Chair Powell. Technically, since the March breach of multi-month support at 2.50%-2.60%, my chart work has pointed to downside targets in YIELD at 2.25%, 2.00%, and 1.90%, all of which have been satisfied, so it is no surprise that YIELD is setting up for a "recovery rally."

It seems that the more Powell is convinced by the markets, the other central banks, and the President to lower rates, the more the recent data points like June Employment, CPI, and Jobless Claims, suggest a cut might not be necessary. What if Trump and Xi work things out to lift tariffs sooner than later, like right after a July 31st FOMC rate CUT?

"One and done" on July 31st, anyone? Could Powell hint at such an outcome in today's Senate testimony? Wow, that would be something for the markets to consider, no?

7 11 YIELD 850 GIF
7 11 YIELD 850 GIF

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