Ten Stories Moving the Market

Federal Reserve Vice Chair Philip Jefferson said Thursday that officials may need more time before deciding whether to raise interest rates again, echoing signals from New York Fed President John Williams earlier this week that cast doubt on bets the central bank would lift rates at its meeting later this month – WSJ. (Why you should care – Jefferson, a centrist, has tended to be one of the more pragmatic policymakers)

Federal Reserve Bank of Dallas President Lorie Logan said the central bank must continue raising interest rates to fully cool inflation, while suggesting that rising Treasury yields may also help slow the economy – Bloomberg. (Why you should care – Logan, a monetary policy voter, has repeatedly call for higher interest rates since taking on her role)

Mortgage rates posted their largest increase in four years this week, one of the clearest signs of how the recent bond-market selloff is spilling into the broader economy; rates for 30-year fixed-rate mortgages leapt to 7.28% from 7.03%, the biggest jump since October of 2022, according to Freddie Mac – WSJ. (Why you should care – the housing market and its associated businesses account for roughly 20% of GDP)

Federal Reserve Vice Chair for Supervision Michelle Bowman said she sees no urgent need for more rate hikes this year; she said policymakers need more time to step back and understand how the recent raise will work its way through the economy – Bloomberg. (Why you should care – Bowman has tended to be one of the more dovish policymakers over the last couple of years)

Federal Reserve Governor Lisa Cook said she sees AI, and its inflationary push, as a top risk ​for 2027, and noted that increasingly frequent supply shocks have ‌had surprisingly persistent effects and become more salient for policy – Reuters. (Why you should care – Cook, a voter, sounds like she will favor a rate hike at the upcoming FOMC meeting this month)

Federal Reserve Bank of Minneapolis President Neel Kashkari said he doesn’t know how high interest rates will have to go to cool prices, adding it’s the central bank’s job to tame inflation after five years of supply shocks – Bloomberg. (Why you should care – Kashkari, an FOMC voter this year, has tended to be one of the more hawkish policymakers of late)

Europe is preparing for “severe” Russian hybrid attacks, according to German Chancellor Friedrich Merz, as Vladimir Putin threatened that his conflict with the west could reach a “fatal point of no return” – FT. (Why you should care – European leaders think Russia is growing increasingly desperate in its “unsuccessful” war with Ukraine)

The Pentagon is sending a third aircraft-carrier strike group and additional Marine Corps ships to the Middle East, according to U.S. officials, adding 9,000 to 10,000 more troops to the region as President Trump considers renewing strikes on Iran after the midterm elections – WSJ. (Why you should care – the prior build up in the Middle East was ahead of the strikes against Iran in late February)

U.S. manufacturing activity was little changed in September, with prices for inputs surging amid strong demand; the Institute for Supply Management said its manufacturing ​PMI dipped to 54.5 last month from 54.6 in August – Reuters. (Why you should care – the data point to continued domestic economic strength, which could stoke inflation growth concerns)

The Federal Reserve Bank of Chicago’s Real-Time Unemployment Rate Forecast for September is 4.10%, a small decline from the BLS value for the previous month (4.14%). This forecast is a product of an increase in hiring and a decrease in layoffs – Chicago Fed. (Why you should care – a low unemployment rate will signal to central bank officials that there’s no need to ease monetary policy)

Economic Calendar:

Spain - Unemployment Change for September (3 a.m.)

ECB's Cipollone (Executive Board Member) Speaks (3:30 a.m.)

ECB's Vujcic (Vice President) Speaks (3:30 a.m.)

Italy - Retail Sales for August (4 a.m.)

U.K. - BoE Decision Maker Panel Survey for September (4:30 a.m.)

Eurozone - CPI for September (Flash) (5 a.m.)

U.S. - Employment Report for September (8:30 a.m.)

Fed's Logan (Dallas, Voter) Speaks (10 a.m.)

U.S. - Factory Orders for August (10 a.m.)

U.S. - Baker Hughes Rig Count (1 p.m.)

U.S. - CFTC's Commitment of Traders Report (3:30 p.m.)

Fed Releases Balance Sheet Updates on Commercial Banks (4:15 p.m.)