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Yesterday's CPI print didn't calm anything down — it just raised the stakes for next week's Fed meeting. Core inflation came in roughly in line with forecasts but ticked lower, yet that wasn't enough to shake the market's growing conviction that the Fed hikes rather than holds. Odds of a hike at the September 15-16 meeting jumped to around 91% this week, a striking reversal from the "will they cut" conversation that's dominated headlines for years. The 10-year Treasury yield

How many hikes would it actually take to control inflation (if that’s the intention) and what would it cost? The Fed meets September 15–16, and for the first time in years, markets are pricing in real odds of a hike rather than a cut. Fed funds futures have this above 70%. Core PCE inflation is running around 3.3%, still above target, and Chair Kevin Warsh has signaled he's not satisfied with "good enough." So, if the Fed decided hiking was the priority, how many would it tak

The PPI report came in hot this morning, and the market is paying attention. August Producer Price Index: 5.4% YoY, above the 5.3% forecast. Zoom out and the trend is the story. PPI cooled from double-digit highs in 2021-2022 down to near-zero, then started climbing again through the summer, 2.5% in May, 4.9% in July, now 5.4% in August. That's a clear re-acceleration, not noise.Timing matters here. This print lands the day before CPI, with the Fed's two-day policy meeting st

Treasury Secretary Scott Bessent just told currency traders: "I am the house now... you can bet against me if you want." It's a striking line from a man who made his name on the other side of that kind of confidence, helping Soros break the Bank of England in 1992. It’s also an invitation to a fight, and there are plenty of hedge funds that may pick up the gauntlet. Now he's the one defending a currency peg, in a sense, except this time he's got Tokyo on his side. The US and

Take a look at the two charts below: the botttom one shows the seasonality of the S&P500. Since 1928, September is the only month that closes lower more often than higher for the S&P 500. The average return has been -1.10%. The back half of the month tends to be the weak spot (-0.91%), and in midterm-election years, like this one, the average drop widens to -1.50%, with intra-month drawdowns averaging close to -6.2%. The statistics don’t look good for investors this month. An

It’s the yen again. Although nothing has been confirmed, the BoJ and the MoF in Japan have likely intervened the currency market, and it could be a warning shot for U.S. asset prices. USD/JPY has strengthened from ~161 in late August to ~154 as of September 4-5, its sharpest drop since the Ministry of Finance's intervention this summer. The catalyst seems to be BOJ Governor Ueda and board member Takata signaling a larger-than-expected rate hike is on the table at the Septembe

For almost two decades, the relationship between gold and real yields (the nominal yield minus inflation) was one of the most reliable in macro:if you look at the chart below, you can see it. Plot gold against the US 5-year real yield, and the dots line up almost perfectly along a downward slope. Higher real yields meant higher opportunity cost for holding a zero-yielding asset like gold, so gold fell. Lower (or negative) real yields meant the opposite. From 2003 to early 202

Where does the 10-Year Treasury need to land before institutional money rotates back in, especially with private credit sitting on so many books right now?The 10-year is trading near 4.70–4.80%, its highest level in about three years. The treasury secretary is allowing institutions to front run him, as he intends to buy $4Bn of bonds starting g this Tuesday. On its own, today’s yields may already look attractive relative to recent history. But the more interesting comparison

There are three moving pieces investors need to watch together, because they’re getting tied by the hip: the Yen, the dollar and the 10 year Treasury. The USD/JPY just posted an incredible week, down nearly 2.6% and sliding from the 160 area to the mid-155s, with speculation mounting that Japan's Ministry of Finance stepped back into the market. This follows the coordinated, MoF-Treasury intervention from early August, the first joint U.S.-Japan FX action in years, aimed at c

Let’s have some fun with some Fed accounting. During zero interest rate policy period, after the GFC, the Fed bought a ton of bonds at or below 2% yield. That portfolio consists of Treasury and agency bonds, all of them with duration. At year-end 2025, the Fed’s domestic portfolio carried an ~$844 billion unrealized loss. Long-duration Treasuries (-$458bn) and agency MBS (-$309bn) got hammered as rates rose. That’s probably north of $1Tn loss at today’s yields. And counting.

The Fed hiking in September won't stop yields from rising, and might even accelerate the problem. The bond market is sending a message no one wants to hear. Not the U.S. bond market, the global one. Japan's 10-year just hit 3.00% for the first time in decades. Germany's bund is at a 52-week high of 3.37% and climbing. And yet, markets are pricing in a 60% chance the Fed hikes 25bps in September. But there is an uncomfortable truth: this isn't a rate-level problem. It's a supp

Germany just redrew the map for European fixed income. Germany’s 2026 federal budget allocates roughly €83 billion to the regular defense budget, plus another €25.5 billion from the off-budget Bundeswehr special fund, pushing total military-related spending north of €108 billion. That’s nearly double France’s defense budget and puts Germany on a glide path toward €200 billion in defense and security spending by 2030, close to a third of the entire federal budget. None of this

Markets are now pricing roughly a 50-57% chance the Fed hikes 25bps at the September 16 FOMC meeting, a scenario that seemed unthinkable a year ago. After Chair Warsh’s hawkish Jackson Hole remarks (headline PCE running 3.7% YoY, core at 3.3%), the “higher for longer, maybe even higher” narrative is back on the table. It’s difficult to see how that’s going to help the curve, without breaking a lot of things. Here’s what a 25bp hike would actually mean: (1) for the Cost of Fe

In the recent history of technology, we’ve had a couple of interesting debates: one is the PC vs Mac, and the other is Android vs iOS. In the AI empire, there’s now another similar choice between two options: open or closed models. To run parallels, open models would be similar in philosophy to PC or Android, while closed models will be similar to Mac/ iOS. Why is this relevante now? Because If reports of NVIDIA’s ~$13B acquisition of Hugging Face hold up, it isn’t just anoth

Warsh delivered his speech. He set the bait, and the market took it. At least for now. Fed Chair Kevin Warsh’s Jackson Hole speech yesterday broke from the recent playbook of no forward guidance, and the market response was telling. Stocks climbed, but the real story was in rates: the 2-year Treasury yield jumped roughly 8bps to 4.31%, and Fed funds futures now show 57% odds of a 25bp hike in September. Warsh doubled down on inflation concerns, noting that recent readings, wh

In about three and a half hours, Fed Chair Kevin Warsh gives his first Jackson Hole keynote, and the stakes are unusually high for a “first speech.” Three months into the job, he’s broken from tradition by refusing to spoon-feed markets forward guidance. That’s bought him some independence optics, but it’s also left investors and even some of his own colleagues thirsty for a real framework. Core PCE is running at 3.3%, well above target, and the Fed hasn’t hit its 2% goal in

Yesterday’s PCE report gave the Fed exactly the kind of “nothing to see here” print it needed heading into September, despite the fact that their preferred measure of inflation has been above target for 65 months now. The numbers for July: Headline PCE: +3.7% YoY (unchanged from June). Core PCE: +3.3% YoY (in line with forecasts). where do we go from here? Inflation is stuck, not accelerating. Spending is cooling. Real consumer spending was essentially flat, with durable goo

NVIDIA reports Q2 FY27 earnings today, after the close, arguably the single most consequential print in markets this year. Beyond the typical numbers, where the company will likely beat or meet expectations, it’s the guidance and the relationship with its clients that matter the most: (1) Data center / Blackwell Ultra ramp: this is still the core growth engine, and supply availability matters as much as demand. (2) China: guidance reportedly assumes zero data-center compute

Two data points collided this week, and together they tell a story worth watching. The 30-year Treasury yield touched its highest level since 2007 last week, north of 5.2%, before the Treasury stepped in, announcing it would roughly double the size of its long-dated buyback operations (10s to 30s) to shore up liquidity. Yields dipped on the news, then largely round-tripped back toward those highs within days. That’s not textbook yield curve control, the Fed isn’t capping rate

What Can the Fed Actually Do About Long-Term Treasury Yields? Long-term Treasury yields have been the story of 2026. The 10-year has pushed above 4.7% and the 30-year has climbed past 5.2%, driven by heavy debt issuance tied to the AI buildout, persistent federal deficits, and inflation worries reignited by higher energy prices. Treasury Secretary Scott Bessent has already moved unilaterally, expanding long-bond buybacks and coordinating currency intervention, putting pressur