Three Things to Know & Watch

Mar 6, 2023

By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch

  • One of the two big events this week will be Fed Chairman Jerome Powell’s semiannual testimony to Congress on monetary policy. He will appear before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday. He is expected to echo comments from other central bankers suggesting the Fed’s work is not finished and rates need to go higher.
  • The February employment report will be released on Friday and will be closely watched. The jobs market has been strong with the unemployment rate at/near historically low levels and with the markets on high alert in terms of the Fed and the incoming economic data. Non-farm payrolls are expected to increase 215,000 and the unemployment rate to remain steady at 3.4%. Average hourly earnings are expected to grow at a robust 4.7% year-over-year.
  • The 10-year Treasury yield will be in the spotlight. It has traded above 4% in recent sessions (last at 3.95%) and with concerns over more interest rate hikes, some strategists are calling for yields to move above 2022’s high of 4.25%.

Three Things to Know

  • The U.S. now has a record $16.5 trillion in household debt, a record $11.9 trillion in mortgages, a record $1.6 trillion in auto loans, a record $986 billion in credit card debt, and total mortgage debt is now more than double the 2006 peak. (Source: The Kobeissi Letter)
  • Over half of current U.S. mortgages were originated in 2020 or later and almost one quarter are from 2021 when 30-year mortgage rates hit 2.8%. (Source: Black Night)
  • Framing-lumber prices are down 72% year-over-year and below pre-pandemic levels. Lumber is currently $370/1000 board feet down from a peak of $1,773. (Source: www.calculatedriskblog).

 

The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.