7+ hour, 52+ min ago   (575+ words) I. Bessent Put For Bonds Over the past few weeks, Treasury Secretary Scott Bessent took three actions to deter the Bond Vigilantes by showing them the Treasury's ample toolbox for stabilizing bond yields. Taken together, these moves amount to a Bessent…...

1+ week, 2+ day ago   (203+ words) I. The Fed's Stock Valuation Model The model quite simply compares the S&P 500 forward earnings yield to the 10-year US Treasury bond yield (chart). The forward earnings yield is the reciprocal of the forward P/E. The FSVM may be starting…...

3+ week, 22+ hour ago   (236+ words) Looking solely at Q2’s GDP growth rate, one would think the economy is weakening. Not so, say Ed and Elias. In fact, demand of all types strengthened last quarter, buoyed by brisk consumer spending, thanks to the Baby Boomers, and…...

1+ mon, 4+ day ago   (235+ words) Neither the Fed’s dual mandate nor its official 2% inflation target have changed. But from what Kevin Warsh has said since assuming the role of Fed chief in May, his priority appears to be the inflation side of the dual mandate…...

1+ mon, 6+ day ago   (119+ words) Right before the release of the June CPI report, Fed Governor Christopher Waller used notably hawkish rhetoric in his latest public address. He stated that if June’s core CPI was hot, the FOMC would need to consider tightening monetary policy…...

1+ mon, 2+ week ago   (204+ words) The June jobs report was widely characterized as weak. Ed and Elias don’t see it that way. The disappointing headline gain reflected a misleading statistical distortion. June’s decline in Leisure & Hospitality was attributable to an early Memorial Day, which boosted…...

1+ mon, 3+ week ago   (235+ words) Consumer spending has been remarkably resilient, growing for the past two years faster than consumers’ disposable incomes have and depressing their saving rate. Current trends point to a negative saving rate by 2030. But that’s nothing to worry about, explain Ed…...

2+ mon, 1+ week ago   (230+ words) This week’s FOMC meeting will be the first over which Kevin Warsh, President Trump’s dovish appointee, presides as Fed chair. Will he succeed in dissuading the hawkishly leaning committee from moving to a tightening bias? Today, Ed and Elias set…...

2+ mon, 4+ week ago   (158+ words) The latest economic releases show that while elevated oil prices are boosting inflation, they aren't slowing the economy: (1) Inflation. Today we learned that April's headline PCED rose 0.4% m/m in February, with the core PCED up 0.2%, both 0.1ppt below consensus. Headline…...

3+ mon, 6+ day ago   (187+ words) Treasury bond yields fell this morning before the minutes were released in the afternoon. The 2-year yield edged down to 4.04%, still signaling that a 25bps cut in the FFR is likely soon (chart). The 10-year yield fell back below 4.60%, an important…...