Lowest Rates in Over a Month. Upcoming Inflation Data Casts a Critical Vote

It was a hotly anticipated week for interest rates due to the arrival of the first batch of big ticket economic data since the Inflation report that came out on February 13th. This week's data was much more friendly, but next week's data is even more important. The first major report of the week was the Non-Manufacturing index from ISM (or ISM Services).  While this may not be a household name report, it frequently moves markets.  In general, lower index values are better for rates, and that's what we got.  Even though the drop wasn't very big, it fits inside the cooling trend of the past two years. The ISM Services data includes other components as well.  One closely watched component is the "prices paid" index which speaks to inflation trends.  As always, lower inflation is good for rates and vice versa.  With that in mind, this week's report was a relief because it undid a potentially alarming spike seen in the last installment.  The following morning, another big ticket report corroborated the notion of economic cooling.  The Job Openings survey measures the labor market from a slightly different angle than the big jobs report that headlined the week, but it has increasingly caused volatility in rates over the past few years.  This week's release didn't have a huge impact, but it didn't have a bad impact either! Another component of the job openings data known as the "quits" rate measures the amount of workers voluntarily ending their own employment.  It's regarded as a good indicator of a shift in economic momentum because people are less likely to quit their jobs if the economy is contracting.