Inflation remained firm in October, underscoring the ongoing risks Federal Reserve officials face in trying to bring price pressures fully under control. The core CPI—which excludes food and energy—increased 0.3% for a third month. Over the last three months it rose at a 3.6% annualized rate, marking the fastest pace since April according to the … Read more
Today October’s CPI is released. At the time of this writing, the markets are suggesting a 60% probability of another rate reduction in December. The markets have also lowered the odds on the scope of future reductions. Treasuries across the curve have been crushed since September as economic activity has been stronger than anticipated. The … Read more
President Trump will soon own the same economic problems they talked about in the campaign, the first amongst them is the debt. US debt is now growing at twice the pace of GDP, which in itself is a robust pace. Every president from WWII to 2008 had talked about resolving the debt issue. Non accomplished … Read more
Is Donald Trump the ultimate comeback kid? Love him or hate him one has to be in awe of his determination and perseverance to overcome. Life is indeed stranger than fiction. Not even the greatest Hollywood writer could envision the events of the last nine years. Perhaps of even greater significance is the make-up of … Read more
Who will win today? As we watch the returns all must remember the country has survived 235 years. This is not going to be the last election and if the American people don’t like the policies they get, more changes will be made in the years ahead. This is particularly true regarding the federal budget; … Read more
This could be potentially a significant week. The election is tomorrow, and the polls indicate an extremely tight race. The betting markets suggest a different scenario with the possibility of a Red Sweep. Democracy is an ugly type of government, but it is the best form yet followed. Differences are generally resolved by words instead … Read more
The Magnificent Severn tumbled over 3% as disappointing outlooks from giants MSFT and META fueled concerns that the AI frenzy that has powered this cohort has gone too far. As noted several times, the mega sized techs have been priced to perfection and anything short of such—either in the current or in future—would be met … Read more
Rising interest rates are expected to negatively impact valuations, especially shares that are viewed as trading at “lofty valuations.” As widely discussed, yields across the spectrum have increased around 50 to 60 bps since the Federal Reserve lowered interest rates about 5 weeks ago. Because it is/was expected that the central bank would continue lowering … Read more
Treasuries are on track for their worst month in more than two years. The selloff has lifted yields over 60 bps for the month, a rise that many thought was unfathomable five weeks ago following the aggressive 50 bps reduction in the overnight rate and the expectations that another 75 to 100 bps of easing … Read more
The Treasury auctioned $70 billion five-year notes today with a yield of 4.138%, slightly higher than the pre-auction expected yield of 4.12%. This compares to a 3.519% rate at the September sale and is the first auction with a 4% “handle” since July. In theory the yield should not be higher than September’s auction given … Read more
