With this week’s rate hike, the federal funds rate has now been tracking the Fed chair’s height for more than 45 years. If President Trump wanted lower interest rates, he clearly should have nominated someone shorter (Kevin Warsh is 6’1).
In addition to a rate hike, this week brought us surging treasury yields, a slew of bad housing stats, signs of ongoing consumer strength, and more.
Monday
Oil Stuff
Oil prices remain above $100/gallon, so it was another bad week on the fuel-price front. Diesel prices keep surging, up to another all-time high at $6.29/gallon, and gas prices shot up to $4.46/gallon, which is by far the highest they’ve ever been this late in a year.
TSA Checkpoint Travel Numbers
After a strong labor day, the number of people flying has fallen back to about 3% below year-ago levels, according to TSA gate check numbers. This could be a warning sign about consumer health, or it could be the isolated effect of significantly higher airfares, which are up about 28% since November according to the Consumer Price Index.
Tuesday
Treasury Yields Keep Climbing
Treasury yields surged again at the start of this week, with the 10-year climbing to levels not seen since 2007. Notably, yields were largely indifferent to the Fed rate hike (more on that below).
The takeaway here is that borrowing costs are going to keep rising.
