Upping Conviction for Up-in-Quality Credit and the Bull Steepener
QUICK QUILL — Tuesday’s relief rally at the short end of the Treasury curve was driven by July’s core CPI not surprisingly to the upside. Elsewhere, NFIB noted that business owners worries about ‘Inflation’ and ‘Poor Sales’ (an…
Clash Between Tariff Concerns for Goods and Faltering Demand for Services Labor
QUICK QUILL — The tariff narrative is hot. The effective tariff rate hit 10% in June, four times the March level. And short-run (one-year) inflation swaps have moved up in kind. Despite these rumblings, long-run (5-year/5-year)…
Overly Burdened Household Balance Sheets Collide with High Youth Unemployment
QUICK QUILL — Outstanding credit card debt contracted in the year ended June 2025 to a level weaker than any recession onset since 1970. In that consumption grew in the recessions of 1970, 1982 and 2001 suggests the…
CEOs and Big Data Herald Rising Joblessness and Lower Rates
QUICK QUILL — U.S. CEO confidence revived in the third quarter, but the C-suite script of cuts to capex and hiring plans and a focus on enhancing productivity speaks to more visible end-of-cycle concerns. To that…
Asymmetric Housing Risks Defy the Fed’s Dual Mandate
QUICK QUILL — Housing developments lean asymmetrically from a dual mandate view, i.e., weaker employment amid cooler pricing, and reinforce a restart to Fed easing. Elevated mortgage rejection expectations intersecting with cycle-low in home selling conditions…
Higher Conviction for a Bull Steepener
QUICK QUILL — Global trade compression, broad based weakness in both ISM Employment gauges, and ISM Backlog breadth and excess supply conditions in the service sector all are flagging disinflation. These factors reinforce QI’s call for…
Third Quarter Risks for Capex and Consumers Emerging
QUICK QUILL — Downgrade risks to the capex and consumer outlooks are on QI’s watchlist. Recent evidence suggests cooling in these two cyclical sectors that underpin private demand. From a fundamental perspective, it argues for reduced…
Neither Trump nor Powell Has a Labor Market Data Leg on Which to Stand
QUICK QUILL — The president and chair of the Fed are waxing equally delusional. The U.S. labor market is neither “booming” nor “solid.” And yet, both are in denial about the true state of the U.S.…
Lower hurdle for a NFP downside surprise means volatility looks relatively cheap
QUICK QUILL — Caution emanating from the Chicago PMI rang true in Challenger’s depressed hiring plans. The fundamentals behind the unemployment mix imply fading the uptick in wage pressures from the second quarter’s Employment Cost Index.…
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