Whereas last week’s FOMC noted signs of stability in unemployment, the past week’s employment-related data served to reinforce the theme of an ongoing less-than-dynamic labor market. For instance, the ADP private payrolls report posted a 22K rise, or less than half the consensus forecast, for January. Initial jobless claims, while not a large spike, nonetheless registered at the highest level in eight weeks. Perhaps weather-related dynamics played a part in these results. Challenger Job Cuts data posted its largest January increase since 2009. Lastly, Thursday’s JOLTS report registered the lowest number of job openings in five years and thereby continued the downward trend of this metric. The week ahead contains a plethora of tier-1 economic data, some of which may shed better light on the labor market. In addition to the rescheduled, owing to the partial federal government shutdown, jobs report for January, there will also be a retail sales update and the January Consumer Inflation (CPI) report.

Back by popular demand, Frank Farone, Managing Director of Darling Consulting Group, returns to join us once again for an informative session focused on Liquidity and Asset/Liability Management. Frank will address key challenges and provide actionable strategies to help FHLBNY members stay resilient and take advantage of the new rate environment now and in the months/years to come.

We are now experiencing a “higher for longer” phase in the interest-rate cycle, accompanied by an inversion in the short-to medium terms followed by a steepening (see following chart). The Fed is still in a restrictive posture, but market expectations indicate a near-term easing, however, uncertainty surrounding the potential of future heightened growth leading to elevated inflation is causing steepening at the longer-end of the curve…