Treasury Yields Return to Trump Era, Signaling Market Anxiety
10Y treasury back to where it was at Trumps inauguration. Its increased almost 0.5% since the Iran war started in a sign that the market worries do the long term effects of Trump’s chaotic presidency. That makes mortgages more expensive. 1Y yield up a similar amount in a sign that Trump won’t get rate cuts from the Fed, a vociferous demand he had of Powell. Trump is very much internally focused and he’s going to be looking for an exit strategy with Iran as soon as he can
2‑Year Treasury Auction Weakest Since May 2024
“Today’s 2 yr auction was terrible:” @pboockvar The bid-to-cover ratio was the weakest since May 2024 and dealers got stuck with the largest amount since October 2022. Traders are having a hard time pricing Fed policy as oil prices swing...
New Book Offers Fresh Insight on Inflation Expectations
Perfect timing for a new book on inflation expectations. https://t.co/CpPzlHzxxf by Olivier Coibion and Yuriy Gorodnichenko https://t.co/Cy5qOH9CED
Rising Gas Prices Hurt 55% of Americans, Undermining Trump
A Reuters/Ipsos poll found that 55% of Americans report that rising gas prices have negatively impacted their finances. AFFORDABILITY = TRUMP'S ACHILLES HEEL. https://t.co/kJMYHDcmB6
IWM Stress Test Shows Economy May Not Be Fine
Small caps aren’t ‘early cycle’. $IWM is a stress test. If it can’t lead, the economy isn’t as fine as the index level suggests. https://t.co/Cwur5o8DPZ
War‑Driven Fed Outlook Ends Rate‑Cut Expectations
Despite investors’ previous hopes for rate cuts, Trump’s war has worsened the Fed outlook — with markets now not expecting further cuts this year (or next). My @morningjoe Chart
S&P Nears Selling Climax Amid Deep Valuation Drop
In the table below, we see that the drawdown in the S&P 500 has now reached 7.6%, with breadth reaching moderately oversold levels. That drawdown masks a far bigger decline in valuations, with the trailing P/E down 20%. The MSCI EAFE and...
Low Unemployment, High Costs: Economy Feels Anything But Strong
They keep saying “low unemployment” and “inflation is under control” Meanwhile eggs are still $7, rent just jumped another $300, and my friends are getting ghosted on 200+ job apps. How is this a “strong economy” when my grocery bill feels like...
Supply Pressure Keeps Rates Elevated Amid Fed Pause
UST and IG supply will be an added headwind for rates this week. The whole curve is trading above the Fed's overnight target range as rate cuts go on pause for now and hedging for a near term rate increase...
Rates Aren’t High—History Shows They’ve Just Risen
and when you find yourself thinking that rates/yields are high, just remember, they're not... they rose for 40 years... they fell for 38 years... they bottomed (big time), almost 6 years ago... https://t.co/6tRJ9pYxtQ
Fuel Price Surge Echoes 2008, 2022, Threatens Equities
Gasoline, Diesel Price Surges May Mirror 2008, 2022 - US average gasoline and diesel prices have approached the $4 and $5 a gallon thresholds, raising the prospect of greater consumer and economic stress -- and peaks akin to 2008 and...
Americans Despise Inflation yet Embrace Its Causes
Investing Quote of the Day: “I continue to believe that the American people have a love–hate relationship with inflation. They hate inflation but love everything that causes it.” - William E. Simon https://t.co/eO3YmqPZEG
Deutsche Bank Predicts US CPI Near 4% in May
Deutsche Bank forecasts US CPI to hit 3.81% in April and 4.02% in May. @soberlook https://t.co/EGLX7QmA3x https://t.co/R7pCnJYmkg
Fed Rate Outlook Shifts Higher Yet Remains Dovish
BofA: Naming the 2026 dots The distribution of dots shifted higher in March, but the voting members still lean dovish and expect to ease this year. https://t.co/Qklr1A2um1
December 2026 PCE Inflation Projected at 3.1%
GS: We Now Expect December 2026 Headline PCE Inflation of 3.1%, 1pp Above Our Pre-War Forecast; Both Headline and Core PCE Could Peak Higher in a More Severe Risk Scenario https://t.co/sMwHyf6s7N
Oil Shocks Fail to Stubbornly Raise Inflation Expectations
GS: Over the Past 40 Years, Even Major Oil Price Shocks Did Not Leave Long-Lasting Effects on Consumer Inflation Expectations https://t.co/8naRIKCG9F
Commodity Price Surge to Add 0.35pp Core PCE by 2026Q
GS: We Estimate That the Boost from Commodity Price Increases to Year-Over-Year Core PCE Inflation Will Peak Around 0.35pp in 2026Q4 in Our Baseline Scenario https://t.co/e4Hp5utn1j
Tariffs Inflate Costs, Threaten Jobs; Need Pro‑Growth Policies
Tariff taxes are raising costs for businesses and squeezing workers. As Governor, I want policies that strengthen U.S. manufacturing, lower costs, and create stable jobs—not add uncertainty and expenses. https://sentinelcolorado.com/nation-world/nation/trumps-tariffs-are-hurting-american-manufacturers-instead-of-helping-them/
Housing Market Unchanged Despite War, Higher Rates
No noticeable impact from the war/higher mortgage rates in the weekly housing data yet: https://t.co/f4wx5tgXQn
College Graduates See Rising Unemployment Amid AI Boom
If Generative AI is empowering people? Why are college educated graduates having a harder time finding employment? Source: a16z via Economic Innovation Group, BLS Data. The unemployment rate for young, college-educated workers has deteriorated more so than the field, and...
U.S. Faces Soft Stagflation: Stagnant Jobs, Rising Inflation
Zero net U.S. jobs added since April 2025. Oil above $90. Inflation projections raised to 2.7%. And the Fed's dot plot has the widest internal split in years. Is America already in soft stagflation? https://t.co/Mn06ovDktZ
Bessent Prioritizes 10-Year Treasury Over Brent Oil
"Bessent is obsessed with the 10-year. He can let the Brent Oil go up, but not the 10Y-Treasury." @perkinscr97 https://t.co/Mn06ovDktZ
War Hopes Nudge Fed Futures Toward Tiny Cut
The hope of a short-end to the war on Iran sees the Fed funds futures market swing back to a (small chance) of a cut this year--2 bp--. It was around 7 bp of tightening before the weekend and 61...
Small Rise in Private Credit Defaults Cuts GDP 0.1%
"We estimate that a modest increase in private credit default rates to 3-4% (the lower end of the range for leveraged loans in prior credit cycles) would result in a small drag on GDP of about 0.1%." - Goldman
PMI Slump Signals Looming Stagflation Despite High Inflation
Flash PMIs drop Tuesday. First real data read since oil hit $112. In my experience, the PMIs are the most honest early signal of what's actually happening in the economy. If manufacturing and services both print below 50 while inflation expectations stay...
Majority Predict US Recession Within the Year
Poll results: 60% of respondents said the US economy will fall into a recession this year... https://t.co/tNssjMxbdK
Fed Reacts Differently to Oil Price Shocks
I used Claude to draw a chart that captures how I see the Fed's asymmetric reaction function towards oil. https://t.co/q9WcR7aCNC
US Stagflation Traps Fed Amid Jobs, Energy, Debt Crisis
The US economic situation is grim & simple, writes @LynAldenContact STAGFLATION Jobs have stalled, energy prices are squeezing consumers, yields are rising, and the Fed is trapped. Debt, war, and economic weakness are feeding each other now. #LynAlden #Stagflation #Recession #Oil...
January 2026 Construction Spending Slightly Declines Amid Upward Revisions
"Construction spending during January 2026 was estimated at a seasonally adjusted annual rate of $2,190.4 billion, 0.3 percent below the revised December estimate" https://www.census.gov/construction/c30/current/index.html This below the consensus forecast for an increase, however the 2 pervious months were revised up.
Long-Term Treasuries Turn Risk‑On, Driven by Hedge‑Fund Basis Trades
LT USTs are now a "risk-on" asset: 10y UST yields UP on risk-off, DOWN on risk-on. This is the price action you would expect when 37% of net issuance of UST notes & bonds since 2022 have been bought by "Cayman...
2‑Year Yield Slides to Session Low, Bears Struggle
Treasury bears tried to claw back after the 705am ET yield plunge, but the 2yr yield is back on the session lows... down 10bps to 3.81% https://t.co/Cq2pe8M3wf
Steepening 10‑3 Curve Signals Shift to Cyclical Value Rally
The 10-3 Treasury Yield Curve is as steep as it has been since July 2022 after the 10-year spiked over the weekend. Historical playbook Every cycle: * Curve inverts → tightening / late cycle * Growth slows / recession risk builds * Fed pivots →...
Fed Rate Path Likely Unchanged Under New Chair
WSJ's @NickTimiraos discusses the awkward Fed Chair transition to come, pointing to, amongst others, the "break" and "lack of continuity". That's mostly right, subject to an important caveat: Powell last December talked up productivity gains - a core argument by...
US New Home Sales Plunge 17.6% to Pandemic Lows
From December to January, US new home sales DROPPED by a STUNNING 17.6%. Sales were at their lowest level since the COVID-19 pandemic. AMERICAN HOUSING MARKET = IN THE TANK. https://t.co/AMSqv9ZMsT
Oil Shock Trims Consumption Outlook, Dampening Growth
“We revise down our consumption forecasts by 30bp due to the oil shock, which more than offsets the 20bp boost we factored in from fiscal. Real consumption grows 1.7% (4Q/4Q) in 2026. Higher prices and slower labor income growth mean...
Healthcare Drives Job Growth, Outpacing National Gains
"Over the past year, the U.S. has added 156,000 jobs—but healthcare alone was responsible for 375,000 new jobs." https://t.co/85IevT4vGd
California's $20 Fast‑food Wage Lifts Food Prices 3‑4%
New @nberpubs: "The Effects of California's $20 Fast Food Minimum Wage on Prices" https://t.co/pdrjLJOmR7 "Food away from home prices in California's four in-sample MSAs increased by 3.3 to 3.6 percent relative to 17 control MSAs through December 2024." 😲 https://t.co/Y6uER8kNGi
Cutting Top Tax Rates Could Boost Revenue, Study Finds
New @nberpubs: "Substitution and Income Effects of Labor Income Taxation" https://t.co/pjcuD9w78x "These findings imply a substantial excess burden of taxation, and that reducing top-income tax rates would increase tax revenue." https://t.co/Mjhhws6raG
Study Finds Firm Monopsony Power Weaker Than Expected
New @nberpubs: "Identifying Uncertainty, Learning about Productivity, and Human Capital Acquisition: A Reassessment of Labor Market Sorting and Firm Monopsony Power" https://t.co/jCozurjBnv "We find... a lower degree of firm monopsony power than typically documented." https://t.co/alf5En23h8
Fed May Need Emergency 0.5% Rate Cut Amid Credit Slowdown
If credit markets continue slowing down because of straits of Hormuz oil shock and unemployment shoots up, Fed may have to announce an emergency half a point cut in next two weeks.
Energy Surge Deepens Fed Transition Crisis for Warsh
The run-up in energy prices is making a very awkward Fed transition even more fraught. This was already complicated. Kevin Warsh's confirmation is stalled by the DOJ probe and the Tillis blockade. Plus, unlike every incoming Fed chair since Volcker, Warsh...
US Debt Surge Mirrors 1980s Argentine Crisis
In 1973, US debt/GDP was 31%...today it's 122%. US fiscal deficit/GDP was 1%...today, it's 6% on its way to 8-10% (or more if the war drags on.) Translation: "That 70s Show" will feel like "1980s Argentina with US characteristics."
Fed Will Prioritize Inflation Amid Oil Shock, Unless Markets Worsen
I mostly agree w/@biancoresearch here. Covid, tariffs and Iran all had elements of supply shock. Covid's came with a demand shock too so inflation dominated Fed response. Tariffs were 2-sided; Fed first prioritized inflation, then growth. w/oil, will prob prioritize...
Markets Reprice Inflation Shock, Not Recession Fears
1/4 Yesterday I posted the thread below arguing that the market is repricing an inflation shock, not a recession scare. 10-year yields are rising, bond volatility is exploding, inflation expectations are jumping, and Fed pricing has swung from cuts toward hikes. Follow up...
Growth Slump Extends Through 2026‑2027, Hits Jobs
“Growth is lower, not just for one quarter. It stays lower throughout all of 2026 and all of 2027.” In English: this isn’t a blip. It’s a persistent hit to jobs, incomes, and the economy’s trajectory.
New Spending Adds Debt, Not Supplemental Funding
To be clear: There is nothing “supplemental” here. It’s incremental debt on top of an already large deficit. https://t.co/0Rg6IfCmHu
Oil Price Surge Adds 2.8% to CPI Inflation
Funny math. If Dec oil meets futures. The YoY inflation of oil will be roughly 40%. Pick your inflation basket weighting and any feed through to core . Headline CPI direct is roughly 7%. Others...
US Debt Hits $39 Trillion, Ignored by Leaders
As Dave Walker, former Comptroller General of the US, and I wrote in @FortuneMagazine, "total [US] federal debt surged past $39 trillion, or 125% of GDP... Despite the federal government's fiscal time bomb, the US Congress and the President remain with...
Markets Shift to Tightening, Cuts Delayed Until 2027
Markets are now pricing 8bps of TIGHTENING by year-end. Not cuts. Tightening. Six months ago the market expected 3+ cuts in 2026. Next potential cut: autumn 2027. Good luck hitting even that. https://t.co/mmyLstJwNe
Rate Cuts Improbable This Year, 20% Chance in December
Last week I said the chance of a rate cut according to the polymarket was more than likely not happening Some thought I was wrong Needless to say no rate cut happened I need you all to pay attention… this ENTIRE YEAR (as...