Liberty CMBS Rates and Interest Rate Commentary For 1/9/14

ADP released its private sector hiring report on Wednesday and it showed that the private sector added 238K jobs in December with small businesses leading the pack adding 108K jobs. From this report and other recent news on the jobs front, it seems that businesses have started to beef up staff, despite a Gallup report that showed more Americans think the economy is getting worse than better.

Mark Zandi, chief economist of Moody’s Analytics, said in a statement that the report shows a broad range of job gains across a number of industries.

“It appears that businesses are growing more confident and increasing their hiring,” said Zandi.

The good jobs news caused 10-year treasuries to rise on Wednesday, flirting with that important psychological hurdle of 3% that it reached at the end of 2013. Bloomberg reported that the 10-year hit 2.99% on the news.

“The market is taking it as a reason to sell back off toward the 3-percent line,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, is quoted by Bloomberg. ’’Any crossover of 3 percent will be met by good demand. We’re relatively close to the high end of the trading range.’’

Also in the city of brotherly love, Philadelphia Fed President Charles Plosser wasn’t showing any love toward those who like their interest rates at historic lows. Market Watch reported that Plosser suggested “the central bank may have to be ‘aggressive’ in lifting interest rates and may have to chase market rates higher, if banks were to quickly release reserves.”

He hinted that the call to keep the Fed funds rates below 2% even as the economy improves might be a bit too low and political pressure to lift rates might be on the horizon.

Plosser’s views aren’t just speculation. He will become a voting member of the Federal Open Market Committee this year.

For this week’s CMBS rate from Liberty SBF, please click here.