Monthly Notes
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Tale of Two Economies Continues, with Policy Becoming a Headwind.The build-out of artificial intelligence (AI) continues to elevate business investment and is resulting in soaring profits, while waning tax refunds and higher borrowing costs threaten to slowdown consumer spending. Policy may remain active source of volatility this autumn as the…
Bond Vigilantes are the Captain Now as Fed Finally Capitulates. The Federal Open Market Committee’s hand was forced to hike this month as yields across tenors climbed north of 5%, and various measures of growth and inflation continued to run hot. Fortunately, signals of economic strength give the central bank…
Economic Growth Steady, but Carried by Investment. Policy a Near-Term Risk.The build-out of artificial intelligence (AI) data centers continues to elevate business investment and is resulting in soaring profits, framing a constructive backdrop for risk assets. Job growth is still slow, but tax refunds helped to keep consumer spending going…
Economy is Still on Solid Footing; Inflation is the Biggest Risk Most signals confirm that strong AI-related business investment is keeping the US economy on solid footing, with the biggest risk to the outlook still persistently high inflation. Leading indicators were mixed in August. Manufacturing continued its year-to-date resurgence, with…
Economic Growth Still Steady, Carried by Investment. Tariffs are Back. The build-out of artificial intelligence (AI) data centers continues to elevate business investment and profits, framing a constructive backdrop for risk assets, even at somewhat extended valuations. Job growth is improving after slumping in 2025, helping to keep consumer spending…
Chart of the Month: Economy is Coasting, But Inflation Remains a Thorn in the Market’s Side Indicators of economic growth remain solid but price inflation remains well ahead of the Fed’s target and it is perpetually pestering both equity and bond markets. Employment appears to be strengthening, aiding the growth…
Economy Steady, but as Peace Deal Emerges, Inflation Remains Top of Mind Growth indicators remained steady in June, with both the ISM Manufacturing and Services PMIs continuing to beat economists’ estimates, but inflation readings continued to come in well above the Fed’s comfort level. As we pointed out back in…
May’s Top Take – Earnings Make the World Go Round If May proved anything it’s that earnings seasons can quickly change the market narrative. Even though the economy rose merely 1.6% in the first quarter on lackluster consumer spending growth, it was a banner quarter for US companies amid rapid…
