US Economic Chartbooks
Please see our Economic Week Ahead Chartbook for a discussion of next week's economic releases provided in a visually friendly format that includes graphs, brief descriptions of SMR's forecasts, and links to detailed data previews. If you missed anything from last week, see our Economic Week in Review Chartbook for a look back at the releases with links to full analyses.
Fixed Income Focus: Payrolls On Tap...Good Month-End Buyside Demand
Bonds led a solid bull flattening move this past week. The long-end was aided by month-end demand, while supply pressures helped to limit the upside for the front-end.
This past week's month-end cycle of 2-year, 5-year, and 7-year coupon auctions were less mixed than usual, as all three went well. The bidding details were very strong though, with another especially good Indirect takedown, and an improved Direct bidder takedown for a change.
Fixed Income Focus
Federal Reserve Monetary Policy Outlook as of May 29, 2015
Our update to the Monetary Policy Outlook reflects our expectation that the time for policy normalization is closer, but probably the first hike in the fed funds rate target will not occur until the September 16-17 FOMC meeting. The Committee has good evidence that the labor market has returned to health -- or nearly so -- while the data for inflation and inflation expectations is less certain. On balance, the FOMC will probably prefer to wait a few months to ensure that the numbers are in place for both sides of the dual mandate.To view the PDF of the outlook, click here: May 29, 2015 Monetary Policy Outlook
What Did We Learn From The April State Payroll Data?
We continue to look closely at the state payroll data to better understand the national employment data. In this note we detail some of the key observations from the April state payroll data, and draw inferences for the May national payroll data.
Debt Limit Update: Cash Crunch Expected in Mid to Late November
--Based on our current projections, Treasury would run short of cash to pay its obligations in the second half of November.
--April tax receipts were stronger than expected, which -- all else equal -- would push back the Treasury's "drop dead date."
--On the other hand, Treasury issued more non-marketable debt to trust funds in March and April than we expected. That debt also counts against the debt limit.
--The Treasury's new policy of holding more cash implies that Treasury will exhaust its special measures to create borrowing authority much sooner than it would run out of cash.
--Once Treasury exhausts its extraordinary measures, it will be effectively limited to rolling over maturing debt, which could be disruptive for the coupon auction schedule in particular.
--As of April 30, Treasury had used close to $130.0 billion of its extraordinary measures.