It’s been a quiet week, so this will be a short post. You’re welcome.

It’s time to go to the mailbox again for questions about a central bank digital currency—a digital dollar issued by the Fed here in the U.S. This is a bit of an obscure topic, but it seems to be getting traction as something to worry about. So, let’s take a closer look.

Stock markets dropped for the third consecutive month in October, with financial markets getting hit by higher interest rates across the board. The U.S. indices were down in the low-single digits for the month, which left the Dow and the S&P 500 below their long-term trend lines. International markets also pulled back by roughly the same amount. Even fixed income was down. Financial markets were clearly in a risk-off mode.

This was the week that the economy showed real signs of slowing down—and markets cheered! All right, it wasn’t quite that simple. But that captures pretty much what happened, so let’s look at the details.

U.S. indices were down for the third consecutive month, with the Nasdaq doing the worst. International markets also pulled back, and fixed income was down. Despite the market performance, job growth remained healthy, consumer income and spending grew, and retail sales increased.

This week was about the markets, which kept dropping even as the economic news continued to be good. Growth last quarter was well above expectations, at almost 5 percent, and personal spending increased for the sixth month in a row. Despite that good news, markets pulled back again, with the S&P 500 looking like it will slide into a correction, down more than 10 percent from the most recent peak in August.

When I look at what mattered each week, there are often multiple candidates. What usually gets the nod for more discussion is what changed that week. That is certainly the case this week. Lots of things mattered, including the war in Israel, and I don’t want to minimize that ongoing tragedy. But what changed this week—and what mattered most in economic terms—was the sudden jump in interest rates.

This week, there is one thing that mattered: the Hamas invasion of Israel. As an act of war and an act of evil, it is obviously worth taking note of. This is a tragedy beyond words, and my heart goes out to the victims. But it is also a sign that things have changed in the Middle East.

Stock markets dropped for the second month in a row in September, closing out a weak quarter for financial markets. The U.S. indices were down in the mid-single digits, which brought markets to low-single-digit losses for the quarter and took the Dow below its 200-day moving average. International markets also pulled back for the month and quarter by roughly the same amounts. Even fixed income was down, with a substantial increase in interest rates. Financial markets were clearly in a risk-off mode.

There were two stories that mattered this week: interest rates and the jobs report for September. For the week as a whole, rate increases seem to have taken away from markets, as they tanked on an increase in the U.S. 10-year yield from about 4.6 percent to 4.8 percent. Clearly, higher rates meant a recession—and that’s bad for the market, right? But then this morning’s jobs report came in much stronger than expected, with 336,000 new jobs, about twice as many as anticipated. With prior months also being revised up substantially, clearly the economy is doing much better than we thought—even with the higher interest rates—and a recession is still some ways off.