MBS Day Ahead: NFP Doesn't Matter in The Bigger Picture

Posted To: MBS Commentary

Strong, stable payroll growth is old news. Yet another NFP reading north of 150k or another 5%-ish unemployment reading are just a few more bricks in fairly meaningless wall . After all, that wall has failed to produce meaningful inflation in the same way its past examples have, and it's inflation that the Fed needs to see in order to feel any pressing urge to hike. And it's not just inflation! Even if the Fed was seeing enough inflation to justify a rate hike, they still face hurdles . The most immediate hurdle is the British referendum on EU membership at the end of the month. Most recent Fed speakers have noted that uncertainty over the so-called Brexit is likely to keep a rate hike on hold in June. Then there's the simple bigger monetary policy picture where the Fed is the only...(read more)

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