Yesterday’s release of two months of employment data was noisy. The bullish narrative was cancelled out by the bearish narrative and vice versa. As noted several weeks ago it may take until early 2026 to clear the noise from the economic releases. Markets were quietly volatile on the data closing in the well-defined range. Worldwide … Read more
There are some that are “shocked” the yield curve is steepening as dramatically as it has following two successive rate cuts. One pundit stated this steepening is as “predictable as it is inexplicable.” Some ardently believed that if the FOMC lowered interest rates, longer dated Treasuries would follow. The steepening in the curve commenced in … Read more
To surprise of many, the 30-year Treasury is now at the highest yield since September as the implications of last week’s interest rate cut and policy stance is being digested by the markets. Inflation is still 50% to 75% higher than 2% FOMC mandated speed limit. Economic growth is “steady” and perhaps accelerating, companies are … Read more
As widely expected, the Federal Reserve delivered a third consecutive interest rate reduction and maintained their outlook for just one cut in 2026. The vote was 9-3 to lower rates to a range of 3.5% to 3.75%. Two of the dissentions advocated no change in interest rates while a third wanted a 0.50% reduction. This … Read more
How will today’s outcome of the Fed meeting be interpreted? Most are expecting the dissention could be great between the hawks and the doves, amplified by political pressures. Many believe the potential incoming Fed Chairman may have a political bias, a poor posture given that the Fed is expected to remain free from political biases. … Read more
Markets were quietly nervous yesterday as many are uncertain over the pace of easing in 2026. Wariness is also growing about the sustainability of a further AI driven rally. Kevin Hassert, a top candidate to take over the role of Fed chair, said it would be irresponsible for the Federal Reserve to lay out a … Read more
It is all but assured that the FOMC will lower rates by 0.25% on Wednesday. Perhaps the most significant outcome of the meeting will be each individual member’s outlook for economic growth, inflation and the neutral interest rate…aka the dot plot. Dissention is great amongst Committee members, the result of the tectonic changes that are … Read more
As widely noted and discussed, the four largest companies in the S & P 500 have indicated that they will spend between 25% and 50% of revenue on AI capital expenditures. Such spending should cause many to ask some simplistic questions. Is this possible? Will the products be available? What will be the return of … Read more
A slew of economic data did little to alter the view that the Fed will lower rates next week. Equites traded higher while bond yields dropped. Bloomberg writes that about 350 companies in the S & P 500 advance despite weakness in most mega caps as MSFT lowered expectations for getting “business customers to spend … Read more
Commenting on perhaps two of today’s driving narratives is difficult; monetary policy/tariffs and AI spending. How are they interconnected? The markets are suggesting an 80% chance of an interest rate cut next week. One of the largest questions that cannot be answered but is a primary determinant of longer-term Treasury yields, what is the neutral … Read more
