depositphotos I captured rate cut expectations before and after the Friday jobs reports. Let’s take a look. 
Data from CME Fedwatch, chart by Mish The current rate is 5.25%-5.50% effectively 5.37%. Rate Expectation Percentage Point Change
Those odds were smack in the middle of volatility.The CME website now shows data as of August 1 (no change on Friday), so they have something messed up.The chart above reflects the huge volatility we saw in bond yields on Friday. Dramatic 1-Day and 1-Week Changes in Bond YieldsFor discussion, please see Dramatic 1-Day and 1-Week Changes in Bond Yields, What Happened?Are too many cuts priced in or not enough?That’s the question. I expect two cuts in September. Looking out to next year, I think too many cuts are priced in. Recession Has StartedOn July 8, I wrote Weak Data Says a Recession Has Already Started, Let’s Now Discuss When
I’ve seen enough. A recession has started. Let’s discuss starting with a very good indicator that has few false positives and no false negatives.
My follow-up post was on August 2.August 2: The McKelvey (Sahm) Unemployment Rate Recession Rule Just Triggered
A recession indicator based off rising unemployment triggered in July. Claudia Sahm, a former Fed economist, takes credit for an indicator she did not invent. Let’s discuss.
Weakening data explains the recession call. Yield curve action provides a confirmation signal.More By This Author:Dramatic 1-Day And 1-Week Changes In Bond Yields, What Happened? The McKelvey (Sahm) Unemployment Rate Recession Rule Just TriggeredUnemployment Rate Jumps, Jobs Rise Only 114,000 With More Negative Revisions
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