Jeff Mayberry and Samuel Lau start off this MMM episode with a review of asset class performances for the month of September, including a 4.6% drop in the S&P 500. After guidance from Federal Reserve officials on tapering quantitative easing, the podcast hosts take note of mixed signals from the U.S. Treasury yield curve (3:19). For example, they observe that the long bond sustained its breakout above the 2% level while the 10-year yield settled below 1.50% after exceeding that level earlier in the week. For the Question of the Week (17:09), Jeff and Sam chew through a raft of research papers written convoluted Fed speak in their effort to put into plain English the Fed’s calculation and use of R-star. So how warmly will Fed policymakers follow through on their taper rhetoric? For part of the answer, Jeff and Sam look to the Oct. 8 release of the next nonfarm payrolls data and how close hiring comes to matching an expected increase of 500,000 for September (37:35).
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