Everyday Economics: Could bond yields and mortgage rates fall further this week? | louder.news

The focus is quickly shifting from inflation to concerns that the US economy may cool too quickly.

First, Goldman Sachs economists hinted that further softening of labor demand could lead to more layoffs. The Beveridge curve, which shows the relationship between the unemployment rate and job opening rates, serves as a crucial indicator of the health of the labor market. A low unemployment rate and a high vacancy rate mean a tight labor market and a growing economy. Movements along this curve indicate shifts between recession and expansion.

Currently, the US Beveridge curve suggests a critical juncture where a decline in vacancy rates could coincide with a rise in unemployment.

This week will focus on personal income, personal consumption data and the Fed's favorite inflation gauge: the PCE price index. The annual increase in the core PCE index is expected to ease to 2.6% from 2.8% last month, which could indicate lower inflation than predicted in the “dot plot” of the Fed, which is currently only suggesting a rate cut in 2024.