It’s always amazing to me that the week school starts, the temperature drops 15 degrees.  Statistical correlation is amazing like that.  For example, since 1948, every single time the Unemployment Rate has increased at least 0.9% from a cyclical low, a recession has followed within the next eight months.  Can you guess the difference between the 3.4% low we saw in April 2023 and the measured 4.2% in June 2024?  I’ll give you a hint, it ends in .9%.

We’ll see the reported Producer Price Index tomorrow, where the headline number is anticipated to drop from 2.6% to 2.3%, inching ever closer to the 2.0% inflation goal. Anticipating that, MBS are turning marginally upward, and setting up interest rates to move another leg lower over the next few weeks.