“How Energy Prices Figure Into the Fed’s Interest Rate Decisions”
The Federal Reserve’s rate‑setting calculus is increasingly tied to volatile energy prices, which have surged amid geopolitical tensions and supply constraints. Market participants are using SOFR and Fed Funds futures to price the likelihood of upcoming policy moves, with recent charts showing a modest tilt toward a 25‑basis‑point hike. Analysts on Marketplace argue that higher oil and gas costs could keep core inflation above the Fed’s 2% target, prompting tighter monetary stance. Consequently, betting markets reflect heightened uncertainty about the timing and magnitude of future rate adjustments.
Grocery Prices Continue to Rise
Grocery prices are climbing faster than last year, according to recent CPI‑food‑at‑home data. The Bureau of Labor Statistics shows a year‑over‑year increase of about 5% in the first quarter of 2024, outpacing the 2023 rate. The Economic Research Service’s forecast...
Trump: “The Straits Are in Great Shape”
Brent crude futures are again nearing the $100 per barrel threshold as market volatility climbs. The United States crude price volatility index has surged alongside spot price gains. Analysts estimate only a 45% chance that Strait of Hormuz traffic will...
Seems Plausible: Recession in 2026
Polymarket’s recession contract defines a U.S. recession as an NBER declaration for any quarter in 2025 or 2026, issued before the BEA releases its Q4 2026 advance estimate. Because the NBER typically confirms recessions with a lag, the contract’s definition lowers...
Brent Prompt Futures Open at +$108
Brent prompt futures opened above $108 per barrel on NYMEX, marking a notable price surge. The rally is driven by OPEC+ output cuts, lingering Middle East tensions, and a weakening dollar that favors commodities. Analysts warn the $108 level could...
Market Expectations of Inflation
Friday’s 5‑year Treasury‑TIPS breakeven spread sits above the Federal Reserve’s 2 % inflation target, mirroring the Federal Reserve’s Dodd‑Katz‑Wright (DKW) expected inflation series. Both metrics suggest market participants price in CPI inflation well above 2 % for the medium term. Kalshi’s latest...
Fed More Likely to Stay Pat?
The Federal Reserve is expected to keep interest rates steady, prompting the dollar index to climb and Treasury 10‑year yields to rise about nine basis points. Higher yields reflect tighter monetary expectations, while the 10‑year TIPS also edged up six...
Interpreting the Shrinking Term Spread
The 10‑year versus 3‑month Treasury spread has been compressing sharply, as high‑frequency data show a pronounced narrowing. Analysts note that the traditional term premium calculation omits heightened default risk, which is evident in rising U.S. Treasury CDS spreads. When inflation...
Guest Contribution: “Understanding Bond-Stock Price Comovements”
The article examines how Treasury bond returns move together with U.S. stock returns, showing that comovement has shifted from positive in the 1980s to negative in the 2000s and back to positive after 2022. Using rolling 90‑day regressions on daily...
“Liberation Day” Interpreted Through the Lens of the Benchmark Revision
The latest benchmark revision of the All‑Employees Total Nonfarm Vintage index reveals that post‑Liberation Day employment figures are weaker than previously reported, especially for August. The revised data shows a sharper decline during months associated with tariff policies, while months...