Inflation on the Front Burner

Inflation on the Front Burner Fed Chair Warsh’s speech at Jackson Hole on Friday had a clear message: the Fed is not declaring victory on inflation, does not view the economy as broadly weak, and will not pre-announce its next move. If upcoming data do not demonstrate faster, durable progress toward 2% inflation, Warsh’s framework […]
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Back to the Future: The Quiet Revolution at the Fed

Back to the Future: The Quiet Revolution at the Fed Fed Chair Kevin Warsh advocates ending the decades of market-saving interventions and breaking the dependency on central bank rescues. He seeks to restore true price discovery by prioritizing long-term stability over short-term market noise, ultimately favoring reduced leverage and organic market cycles. The Warsh era […]
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Is the AI Debt Tsunami Hitting the Yield Wall?

Is the AI Debt Tsunami Hitting the Yield Wall? The Iran war looks unsolvable, and the risk is higher oil prices for longer, bringing inflation concerns back into the picture. With the exception of Microsoft, the mega-tech companies are now free cash flow negative due to the still accelerating spend on AI infrastructure, and they […]
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Crude Awakening

Crude Awakening Market expectations shifted notably this week as interest rates fell and the link between bonds and oil prices—prevalent since the start of the Iran War—broke down. Since the start of the conflict, surging crude had kept traders on alert for renewed inflationary pressure and a more hawkish Federal Reserve. However, by the end […]
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Relief Valve

Relief Valve A pressure relief valve is a safety device that automatically releases excess pressure in a system when it exceeds a predetermined level, preventing potential damage or catastrophic failure. While a relief valve is a critical safety feature, it is not designed  to solve the underlying problem creating the excess pressure. What we have […]
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Jaws

Jaws Just When You Thought it was Safe to go in the Water… Last week we wrote about how inflation was starting to perk up again. This week, the Fed cut the Fed Funds rate another 0.25%, but at the press conference on Wednesday, Chair Powell noted that progress on inflation had stalled and “From […]
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