Biden - Vaccine Mandate

Macro Perspectives: Fri 10 Sep 2021

On Wednesday we talked about the interest rate market, as a spot to watch. The Fed meets in less than two weeks, and if we believe what they've been telling us, we should expect them to announce the schedule to dial down their QE program (beginning as early as October).

With that, on Tuesday, rates were technically sitting on levels for a potential breakout - trading around the 1.39% area on the benchmark 10-year government bond yield. Of course, that would represent a Fed finally moving away from emergency level policies, and it would (related) represent confidence in the sustainability of recovery and reopening.

As you can see in the chart above, the breakout in rates didn't happen - it's gone the other way - the 10-year traded back below 1.30%.

This comes as stocks have four consecutive days of losses (albeit only 1.1% in total for the S&P 500).

We may be seeing some uncertainty in markets heading into a prepared speech from Biden, delivered after the close yesterday. There had been a few hints on what it will cover, but the headline suggested that he will present a plan on virus mitigation, which will include ramping up mandates to raise the population vaccination level.

Beforehand the leaks pointed to mandatory vaccination of government workers and healthcare workers that participate in government healthcare programs (Medicare and Medicaid). The risk here, is to the employment situation.

Here’s a recent article.