Posted To: MBS Commentary

The cause and effect relationship between NFP (the "non-farm payrolls" component of the big jobs report) and the bond market is a tale as old as time. The bigger the beat in NFP, the more rates are supposed to rise. The bigger the miss, the more rates tend to fall. So why are rates spiking after NFP came in much lower than expected today? There are several potential reasons , but one of them is head and shoulders above the rest: today's NFP makes fiscal stimulus more likely in the short term, and fiscal stimulus puts upward pressure on rates! With the unemployment rate moving down to 6.7% from 6.9%, was today's jobs report really that bad? Yes, it really was! The unemployment rate is not the best indicator for the health of the labor market. Unlike the job count, which is…(read more)

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Source: Mortgage News Daily