Let’s get to work. Friday’s US jobs report showed a gain of 222,000 jobs added in the month of June which was better than expected along with positive revisions to prior months. Combined with solid wage growth of 2.5% year-over-year, the Federal Reserve remains on track for further removal of extraordinary policy. Minutes from the central bank’s last meeting also released this week showed that the policy making body was not in perfect agreement of when to start tapering the $4.5 trillion dollar balance sheet they accumulated after the financial crisis but it is looking like before the end of the year. That said, inflation is yet to be a major concern though bond yields have started to back up. The 10yr US Treasury has come off its recent low just above 2.1% in the last few weeks and is headed back above 2.4% where it started the year.
Meanwhile, the 20th G-20 meeting began this week in Hamburg, Germany. Early press is focused on a scheduled Trump-Putin meeting, though nothing of particular consequence is expected to result from the discussion. More broadly, topics are expected to range from global economic growth to climate change to terrorism. It was rather timely that North Korea successfully tested an intercontinental ballistic missile (ICBM) which could carry a weapons payload to America’s shores as it celebrated its 241st birthday this week. What to do in response must be on leaders’ minds though Trump’s effort to push China into a policing role does not seem to be sitting well. I guess everyone is still figuring out whose job it is to deal with the rogue nation.