Insights
U.S. Interest Rates Commentary and Research from Eric Hickman
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History of the “return to normal” stage
It is so common to have a meaningful stock market recovery at the beginning of major stock sell-offs that the concept was enshrined as the “return to normal” stage in Dr. Jean-Paul Rodrigue’s famous “Stages in a Bubble” chart from 2008 (see yellow circle in…
Waller further opens the door to rate cuts
Federal Reserve Governor, Christopher Waller, was interviewed by Michael McKee on Bloomberg TV this morning. This interview comes two days before the Federal Reserve blackout period begins and was unscheduled as of earlier this week suggesting Waller wanted to emphasize his dovish point of view….
The Beige Book deteriorates more
The latest Beige Book, a collection of anecdotal information from the twelve Federal Reserve Districts was released today. I combine which districts are characterized up, flat, or down with the amount of GDP per district from my whitepaper last year to come up with the…
Waller opens the door to rate cuts
For weeks, every FOMC member’s appearance has included the sentiments of “policy is in a good place” and “we must remain vigilant against inflation.” As I wrote before, the FOMC has been using any credible excuse to stall to get more clarity on inflation. In…
What happened last week?
Last week, US Treasury yields rose significantly; the 10-year 50 basis points, and the 2-year 31 basis points. While not unprecedented amounts (the 2-year moved this much over 5 business days last October, and the 10-year in 2022), what is nearly unheard of is that…
Steering around the wall, not turning around
Treasury Secretary Scott Bessent, in a press briefing yesterday, said that the 90 day tariff pause was because so many countries were coming to negotiate, not because of market concerns. It led to a sense that tariffs were on their way out, only held up…
The stock market supercycle is turning
Secular trends in the stock market are defined by a long supercycle that repeats roughly every 30 years on average. ‘Super’ because it spans several business cycles. The stock market tends to spend about 15 years being prosperous and consistent but then an equal amount…
The Fed is buying time with any excuse that works
Jerome Powell gave a speech and Q&A at the Society for Advancing Business Editing and Writing (SABEW) conference for business journalists near Washington D.C. today. This was a different type of appearance for Powell because it wasn’t in the usual places like the Economic Club…
Catalyst, not the cause
The Trump administration’s tariff announcement yesterday was important because of the high levels that will be implemented but just as much for the resolve demonstrated in Trump’s speech. Tariffs represent a vision Trump has had for a long time. Yesterday he said, But I tell…
Powell tacitly concedes a recession is coming
Because economic data hasn’t continued its steep drop starting with the payroll report, a high long-term inflation expectations reading from the University of Michigan last Friday, and Powell (and Mary Daly) going into the blackout period not dwelling on economic weakness, the bond market seemed…