The "higher for longer" narrative about interest rates was toned down in a week with little concrete news about the economy, based on recent indicators that inflation is coming down. Not least last Friday's US labour market report pointed in that direction, with job growth in October below expectations and downward revisions of the two preceding months, hourly earnings increasing just 0.2% in October, and private sector average working hours decreasing 0.3%. During the week, we have in general seen both a declining trend in bond yields and positive sentiment in equity markets. However, central banks have been eager to say that the inflation problem should not yet be considered solved, not least Fed Chairman Jerome Powell, who sent that message on Thursday, leading to a partial reversal of the previous market moves.
The “higher for longer” narrative about interest rates was toned down in a week with little concrete news about the economy, based on recent indicators that inflation is coming down.
United States: Long and Variable Lags Evident in Credit Availability Ben Franklin famously said, “If you would know the value of money, try to borrow some.” Amid a light calendar for economic data, we focus this week on how lenders tightened standards for most loan types in Q3 even as demand for loans weakened, according to the Federal Reserve's Senior Loan Officer Opinion Survey (SLOOS).