THE BASIS POINT

Fundamentals 9/22: High Jobless Claims & Quick Word On Operation Twist

Initial Jobless Claims
-423,000 for the week ending September 17
-Down 5,000 from previous week’s revised 432,000 (was 428k)
-4-week Moving Average 419,500, up 500 from previous week
-Slight improvement but still weak
Initial Jobless Claims

Leading Economic Indicators
LEI for August was +0.3%. This is a statistic calculated from other data and the low reading is the consequence of flight-to-quality

Operation Twist
Rarely have I seen more inane discussion over an economic topic. The fact that the Fed suggested that rearranging the deck chairs of duration was somehow stimulative is bizarre.

It will certainly lower Treasury yields on duration greater that or equal to 7 year and it will lower mortgage rates, but the fact is that it is not the case that business is not hiring because of interest rates. Business is not hiring because business, banks and consumers lack confidence.

Here’s more on the non-Operation Twist part of yesterday’s Fed announcement—the part that’s actually helping mortgage rates.