Submitted by Peter Tchir of Academy Securities
Let’s start with the important stuff: Hope you are having a great 4th of July 250th Anniversary Weekend.
Yields gained back some ground after the relatively weak jobs report (headline plus revisions was negative, the private sector underwhelmed, and unemployment only dropped because the labor force participation rate dropped by a relatively large 0.3%).
I will continue to pound the table (or rant and rave as the case may be) that this Fed Will Cut Rates in September. That was our main topic of discussion on the Bloomberg Radio segment above (and I did get to hear Tom Keene say my view looked smarter after the jobs data, than it had before the jobs data, when we spoke). MarketWatch also picked up on the interview and our prospect for cuts rather than hikes.
I have yet to hear compelling arguments on:
- Why the Cleveland Fed’s Rent metrics are not more accurate than what is currently used in “official” data?
- Why Truflation doesn’t deserve a lot more attention than it gets?
If anything, we’ve received comments pointing us to additional indices, surveys, etc., that likely present a more accurate picture of inflation (and they virtually all signal that we understated inflation post-Covid (hence Affordability is the Issue) and we are overstating the inflation rate now).
I really like the 2-year Treasury here, given what the market is pricing versus what I expect the reality to be.
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