The Fed's July Hike Is a Good Sign for the Market

It was a week that was always going to be defined by June's NFP, and the slowest month over month hiring pace since December 2020. The market also got a disappointing ISM manufacturing print as well as a stronger than expected ISM services number. As a theme, in fact, throughout the bulk of the first week of the third quarter, upward pressure on rates has emerged. We remain biased for rates to drift lower back into the prior range with an ultimate target of $3.50 by the end of September.