interest rates

Reuters has done a state-by-state analysis of wage data in the US, showing average pay rising over 3% in more than half of US states. This puts more pressure on the Federal Reserve to raise interest rates.

Non-farm payrolls were up 200,000 versus 180,000 expected and average hourly earnings were up 2.9% on the year

Everyone is bond bearish these days. Alan Greenspan is because he expects inflation. But this will mean tightening that risks derailing the US economy in 2019 and beyond.

The state of the nation is as good as it is going to get during this business cycle — at least from an economic perspective. On that, we should be a lot more interested in what Janet Yellen has to say in her last FOMC press conference.

The position I have stressed is one that is counter to the bond bear market narrative. But, that is longer-term. Shorter-term dynamics are bond bearish.

Small business optimism is at a 10-year high on the eve of the latest US GDP report - another bullish indicator. Inflation is the key to how this impacts bonds longer-term.

"Basically, with the Fed and the other central banks flooding the world with money, a rising tide lifts all boats." So it's the tightening we have to fear.

Bridgewater Associates' Ray Dalio warned that a rise in bond yields could lead to the biggest crisis in fixed income markets in almost 40 years.

Even though commentary focused on the prevailing bond levels today, what Gross is saying is that the bottom in yields was actually July 2016, 18 months ago.

2018 has started with a lot of angst about bond yields. And there is some cause to be concerned. But this owes to an economy that is growing more briskly and to the Fed that has been and probably will be more hawkish than you think.