We got the January jobs report, and the headline number was that 157,000 jobs were created.
To me, though, one aspect of the numbers resonates louder than the rest — and it explains why rates are plummeting in the face of decent economic news.
Both the November and December jobs number releases enjoyed significant upward revisions. And the current number was in line with forecasts. Despite those newly discovered jobs, the unemployment rate actually ticked up to 7.9 percent.
That underscores just how frustratingly far away 6.5 percent is — the unemployment level at which the Fed says they will stop easing, and raise benchmark interest rates. The Fed has been fairly quick to respond to this notion, as St. Louis Fed President Bullard has commented that the low 7 percent area could possibly be sufficient for a Fed exit on monetary easing.
The 10-year futures contract, however, remains in a well-defined downward trend that I believe will continue. I will maintain my longer-term bearish bias until the contract can settle above 132.07. My downside objective remains at 130.00.
Hey, nobody said this game was easy!