Yields are falling as economic data points to a drop in activity

This week was quieter with economic data steering the direction of conversation. Markets spent the weekend digesting central bank comments at the Jackson Hole symposium, leaving future interest rate movements at the forefront of investor thoughts. That continued on through to this week with key economic metrics such as US job openings reported, as well as today’s US unemployment rate, which saw a 0.3% increase to 3.8%.

A year of tight financial conditions has started to slow economic activity, in addition to helping slow inflation. Central banks have been walking a tightrope of raising interest rates sufficiently to tame persistent inflation, but not sufficiently high to crash the economy. With many metrics now showing early signs that economic activity is slowing, pressure on the Federal Reserve to raise interest rates at their next meeting in November is easing.

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