Even after the 2-year Treasury yield has risen 39 basis points from the intraday lows of Monday, the bond market is still priced for 4 Fed cuts (-1.03%) through the end of the year with three meetings left. This would mean 50 basis points in…

I’ve been wrong with my short-term call in the last two weeks, thinking that interest rates would move higher surrounding the Fed. They have fallen dramatically. Economic data this week has been negative (ISM, Initial Jobless claims, and Unemployment/payrolls.) That, combined with the Fed’s 2nd…

The economic data from the last few days has been, on-balance, stronger for the economy. Q2 GDP, initial jobless claims, core durable goods, and monthly PCE core inflation have improved from their prior levels. Consumer spending was also revised up for May by 0.2% to…

Over the last two days, Retail Sales, Industrial Production, Housing Starts, and Building Permits were released better than economists’ expectations. This contrasts with the nearly-uniform negative economic data we’ve seen since mid-June (see black arrow in the chart below.) Because of the contrast and because…

Bill Gross below on X (formerly Twitter) today saying to buy 2-year Treasuries over the long-end as the yield curve steepening begins. This is what Lantern Capital specializes in; using leverage to give 2-year Treasuries (or related futures) the duration exposure of bonds longer on…

The consumer price index (CPI) was released today for June. Both the headline number and core came in 0.1% less than expected. Also, the closely watched subset components of Shelter and Supercore (non-housing services) were less than the month before. None of this sounds very…

I first showed a draft of my economic data index, the Lantern Daily Economic Index (LDEI), a month ago here. Since then, its weightings, name, and index inclusions have been finalized. I will provide more information about it soon. When the LDEI correlates to yields,…

Interest rates rose today despite economic data coming in on the soft side. Because the movement is concentrated at the long-end of the yield curve (30-year higher by 7.5bps, 2-year higher by 1bps), this is the bond market digesting the reality that Biden is a…

The graphic below, Stages in a Bubble, was created by Professor Jean-Paul Rodrigue in 2008. Note the “New Paradigm” at the top. When I reference the idea of a “new paradigm” in my notes (like here and here), it is because it has long-been noticed…

The headline from the Fed meeting today is that the median of their Survey of Economic Projections (SEP) shifted from expecting three cuts by the end of this year on March 20 (two meetings ago) to just one cut today; up 50 basis points. The…