Week In Review

There were 187,000 people who filed for unemployment insurance for the week of July 18. This is the lowest amount of initial jobless claims for a week dating all the way back to 1969. It's the latest reading on the state of the labor market, which continues to remain in a stasis. Employers have been slow to hire yet also slow to fire over the last couple of years as we've dealt with higher inflation and interest rates. We've seen little to no improvement in these areas, and this week was no exception. Oil prices were back above $100 per barrel this week providing renewed pressure on inflation. The 10-year treasure rate rose to its highest level since early 2025, dragging mortgage rates higher. The 30-year mortgage rate at 6.58% is at its highest level since last summer which will likely not help unlock the housing market, in a stasis of its own as a result of high borrowing costs and housing prices. What to make of all this? Look no further than the short-term bond market. The CME FedWatch tool suggests the probability of the Fed raising rates this coming week have increased from 12% to 34%, and the probability of at least one rate hike before the end of the year has risen above 90%. High inflation paired with low layoffs gives the Fed a clear runway to raise interest rates, and we wouldn't be surprised to see that this Fall.