US Economy Is Slowly Grinding to a Halt, Kelly Says

Market Trends & Economic Outlook - Bond market is performing well, while the outlook for equities is uncertain [1] - The Federal Reserve's policies are influencing the yield curve, with yields decreasing [1][2] - Concerns exist regarding the labor market data, leading to lower yields [2] - The economy is gradually slowing down, and inflation is gradually increasing, potentially influenced by tariffs [8] Labor Market Analysis - Initial jobless claims data may be overstated due to the Labor Day holiday, potentially showing an exaggerated deterioration in the labor market [4][5][6] - The labor market is described as "curious" due to a significant reduction in labor supply, indicating a still tight market despite some weakness [10] - Businesses are hesitant to hire due to uncertainty regarding tariffs, potentially freezing hiring processes [11] Inflation & Consumer Spending - CPI data shows a 5.9% monthly increase in airline fares, reflecting a K-shaped economy where some can afford higher costs while others cannot [3][7] - Motor vehicle repair costs increased by 2.4% month-over-month, contributing to inflation [7] Fiscal Policy & Stimulus - Tax cuts retroactive to January 1, 2025, are expected to provide a stimulus effect in early 2026 through increased tax refunds [13][14][15] - The average income tax refund is projected to be over $4,000 in 2026, with 70% of households receiving it, acting as a significant economic stimulus [15]