IGA Capital Weekly Economic Brief
- Joshua Hawley
- Mar 7
- 3 min read
March 7th, 2025 Joshua Hawley CEO IGA Capital
Market Overview: Jobs Report & Economic Sentiment
This week’s February payroll report will be a key indicator of labor market strength, with expectations for 160,000 new jobs, reflecting moderate growth amid federal workforce reductions and softer consumer spending. The federal hiring freeze and spending cuts introduce uncertainty regarding their private sector impact and broader economic growth.
Meanwhile, Treasury bonds posted their largest monthly gains since July, benefiting from weaker economic data, trade policy uncertainty, and government job cuts. Bloomberg's Anna Wong noted that recent data, including downward revisions to Q1 GDP growth, have raised concerns about a potential slowdown, challenging the narrative of U.S. economic resilience. The coming weeks' jobs and inflation data will help clarify the direction of bond yields and equity markets.
Key Economic Data This Week – Jobs in Focus
Monday, 3/3 – Construction Spending
Tuesday, 3/4 – No major reports
Wednesday, 3/5 – ADP Payrolls, Factory Orders, ISM Services, Beige Book
Thursday, 3/6 – Jobless Claims, Factory Orders, Fed Speakers (Harker, Waller, Bostic)
Friday, 3/7 – Non-Farm Payrolls, Unemployment Rate, Fed Speakers (Bowman, Williams, Kugler, Powell)
Next Week: CPI, PPI, University of Michigan Consumer Sentiment
Treasury Yields & Fixed Income Trends
Treasuries rallied last week, shifting market focus from inflation fears to slowing economic growth. Strong demand for 2-, 5-, and 7-year Treasury auctions drove yields lower, though foreign participation declined.
A weaker-than-expected Core PCE report fueled optimism, pushing the 10-year Treasury yield below key resistance levels (4.25%). The Trump administration has advocated for lower long-term rates, citing benefits for housing and corporate borrowing, while Treasury Secretary Bessent has dismissed extending bond maturities through new issuance.
2-Year Treasury Yield: 3.99% (-20 bps)
10-Year Treasury Yield: 4.21% (-22 bps)
Yield Curve (2s/10s Spread): Flattened 2 bps to 21 bps
Current 10-Year Yield: 4.25% (+4 bps this morning)
Federal Reserve & Rate Expectations
Market sentiment has shifted towards two rate cuts in 2024, as fears of slower economic growth and stagflation gain traction. The impact of tariffs and labor market trends further complicates the Fed's outlook.
Last week’s Core PCE print came in at 0.3% MoM, marking its lowest YoY level since June 2024. However, Fed officials remain cautious, requiring consistent inflation improvements before adjusting policy. Fed Chair Jerome Powell is set to speak on Friday, offering further insight into the Fed’s thinking.
The FOMC meets next on March 18-19, with no rate change expected, as policymakers digest new inflation and employment data. Markets are now pricing in 69 bps of easing by year-end, up from 46 bps last week.
Implied Fed Funds Rate Forecast
March 19: 4.310%
May 7: 4.236%
June 18: 4.062%
July 30: 3.967%
September 17: 3.815%
December 10 (Final 2025 Meeting): 3.635%
Strategic Insights for IGA Capital Clients
As uncertainty in interest rates and economic growth persists, businesses must optimize their capital structures. IGA Capital continues to provide structured finance solutions, assisting companies in navigating debt financing, private equity, and structured trade finance.
Corporate & Project Finance – Tailored funding solutions for project development
Trade & Export Credit – Leveraging Export Credit Agencies (ECAs) for global transactions
Alternative Capital Strategies – Access to private credit, institutional investors, and structured funding
For capital financing strategies aligned with market conditions, contact IGA Capital today.
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