Just yesterday, we were nodding in agreement and acceptance of the fact that rates were better served by cooling off a bit (read: “rising”) after improving at a pace that seemed too quick for the motivations earlier in the week. In other words, it was a bit of a pickle to explain why Tuesday and Wednesday’s news and data were worth a surge to 3-month lows. Now today, we’re right back in the same pickle, but everyone who’s cool knows that pickles are delicious. Today’s is no exception with the average lender easily moving down to new 3-month lows. As for motivations, today actually wasn’t quite as pickled as Wednesday. We had the week’s most anticipated economic report and the most anticipated Fed speech. ISM Manufacturing only came in a bit weaker than expected (good for rates), but perhaps more importantly, it didn’t come in higher than expected. Thus, the bond/rate market wasn’t forced to quickly change its strategy of adjusting for a new, lower rate outlook for 2024. Same story with Fed Chair Powell’s mid-day speech. Knowing what we know about Powell, it wasn’t too likely that he’d take a strong stand in one direction or the other (which is exactly right given the “data dependent” nature of the Fed’s rate considerations), but some saw a risk that he would intentionally try to nudge rates higher due to the speed with which they’ve recently fallen. Powell definitely didn’t convey any such agenda today and bonds/rates were invigorated as a result. Traders moved to defend against the possibility that next week’s data continues arguing for lower rates. We say “defend” because if the data is accordingly weak, the current level of rates is far too high.