Daily Market Color

Rates Rise as Congress Hurries to Meet Today’s Stimulus Deadline

Rates rise as Congress makes progress on stimulus package
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are working to meet their Tuesday evening deadline, scheduling to speak again today following their conversation yesterday.  According to Pelosi, Republicans and Democrats are stilling struggling to compromise on state and local funding, child care facilities, and the virus testing budget.  White House chief of staff Mark Meadows is optimistic, commenting “We’re making very, very good progress.” 

Despite the strides Congress has made regarding the stimulus, stocks closed at a two week low — the S&P 500 and DJIA falling 1.6% and 1.4%.  Treasury yields and rates ended higher across the curve yesterday– the 10-year closing a bp higher.  UST yields are trading mixed this morning.
Fed is not yet committed to launching a digital dollar
During his speech at the IMF on Monday morning, Fed Chair Jerome Powell said the central bank will consider working with the private sector on a digital US dollar.  Powell nodded to the strength of the US dollar, mentioning that most of the $2 trillion Fed notes are held internationally.  Before the central bank acts, Powell mentioned the Fed must first discuss the monetary policy impacts a digital dollar could have, adding, “I actually do think this is one of those issues where it’s more important for the United States to get it right than it is to be first.”
Housing starts rise to 1.415 million in September, missing economist expectations
Starts resumed its monthly rise after unexpectedly falling to the revised 1.388 million in August but fell below the pace of permit growth.  The number rose to 1.553 million from 1.476 million last month.  Economists attribute the rise to the low interest rate environment and large numbers of people relocating from cities to the suburbs.  The rise comes just as October US homebuilder confidence index rose to an all-time high of 85 from 83 last month. 

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