Several reports coming this week could offer more context about where the US economy stands. One on Thursday will offer the final reading for the US economy’s growth in the spring, and another on Friday will give a look at how much US consumers are spending.
Such economic reports, particularly on the job market, are taking top priority on Wall Street because the main fear is now a slowdown in the job market. It’s a notable shift from prior years, when the most attention was on anything related to inflation.
But now that inflation has come down substantially from its peak two summers ago, the Fed has shifted gears.
It feels less need to keep rates high in order to slow the economy enough to stifle inflation, hence last week’s cut of half a percentage point to its main interest rate. And it feels more pressure to prop up the job market and overall economy, hence its plans to keep cutting interest rates this year and next.
In the bond market, the yield on the 10-year Treasury held steady at 3.74 per cent from late Friday. The yield on the two-year Treasury, which moves more with expectations for Fed action, fell to 3.57 per cent from 3.60 per cent late Friday.
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In stock markets abroad, indexes held mostly steady in Europe after preliminary data suggested business activity in the euro zone is weaker than economists expected. Germany’s DAX rose 0.7 per cent, while the French CAC 40 rose 0.1 per cent.
In Asia, movements for indexes were also muted. Indexes rose 0.4 per cent in Shanghai but slipped 0.1 per cent in Hong Kong after China’s central bank lowered its 14-day reverse repurchase rate on Monday. That followed its decision to keep key lending rates unchanged last week, when investors had been expecting a cut.
AP
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