Key Takeaways Typically, I don't do a follow-up blog post to my post-FOMC "take,†but heading into 2026, the outlook for monetary policy has gained a tremendous amount of attention. Indeed, not only will the Fed have a new Chair, but the actual decision-making process of the policy maker is also being debated. It's against this backdrop of a "house divided†that a more in-depth analysis is warranted, as it appears as if the Fed now has what we could call "silent dissenters.†What exactly is meant by the te ...

Goldilocks.  That’s probably the best way to describe it. Investors, including me, were fearing the worst: a Fed hamstrung by its dual employment and inflation mandate, unable to make the necessary changes to rates to keep the U.S. economy from stalling. The November CPI inflation data released today may change that in a big way. It removes much of the angst caused by this week’s unemployment report, which showed the U.S. unemployment rate increased to 4.6% in November, its highest level since 2021. Acco ...

I explained why the dollar index was stuck in neutral in a November 4 Barchart article. I concluded the article with the following: The dollar index is stuck in neutral in early November 2025, but it is consolidating near the low end of its recent trading range. The odds currently favor a continuation of the lower lows and lower highs and bearish trend in place since the high in early 2025.  More News from Barchart While the next significant move in the index is a coin toss, the odds remain tilted to t ...

With the Fed lowering their Fed Funds Rate again last week , treasury rates -- especially those on the long end of the yield curve -- have been dominating headlines. The curve is still looking wonky, with the 3-month UST still yieldingNewsletter Author | Investment Advisor | Top 5% of Experts on TipRanks | Long Signal, Short Noise | I am a macro-oriented and data-driven investor who obsesses over connecting dots that others don't see (or want to see), expressing my views through concentrated, asymmetrical, ...

Group 1 - The meeting was characterized by a focus on being "well positioned," suggesting a cautious but stable outlook from the Fed [1][2][5] - The Fed Chair expressed skepticism about the accuracy of monthly job gains, indicating a potential overstatement of 60,000 jobs, which could imply a more negative job report [2][6] - Inflationary risks were deemphasized, with the Fed Chair framing inflation as less of a concern and highlighting progress made in controlling it [3][4][5] Group 2 - The Fed has cut rates by 175 basis points since September, yet the 2-year Treasury yield remains unchanged, indicating a disconnect between Fed actions and market responses [6][8] - Despite the rate cuts, long-term interest rates, such as the 30-year Treasury, have increased by approximately 75 basis points, suggesting that lower Fed rates may not be beneficial for long-term rates [8][9] - The yield curve steepened following the Fed's cut, with the difference between 2-year and 30-year rates reaching about 124 basis points, indicating potential future increases in long-term interest rates [10]

Group 1 - The Federal Reserve is perceived to have room for changes that could enhance the velocity of the financial system [1][2] - Current borrowing practices indicate that the overnight funds rate is less relevant, suggesting a need for stability in the back end of the yield curve to support mortgage rates and existing home sales [2][3] - A proposed adjustment to the funds rate is to set it at 3%, which could align with market expectations and inflation break-even rates [3][4] Group 2 - The discussion emphasizes the importance of addressing mispricing in the markets to achieve a more favorable rate environment [4] - There is a belief that after adjusting the rate, further evaluations should be made to determine if additional changes are necessary [4]

Core Viewpoint - The current equity market may resemble the conditions of October 1999, with potential for significant gains ahead, but also carries risks of a market peak [1][3]. Market Sentiment - 54% of fund managers believe the market is in a bubble, though it is characterized as a small one compared to historical bubbles which saw gains of 400% to 600% [2]. Interest Rates and Economic Outlook - The expectation is that the Federal Reserve will aim for a funds rate around 2.5% to 2.75%, which could support higher equity prices [3][4]. Investment Strategy - There is a cautious approach to current stock positions, with a belief that the market could be substantially higher by the end of the year, particularly favoring the Nasdaq [5][6][7]. Market Dynamics - The final phase of a bull market typically sees a doubling of annual gains, indicating that while the best part of the market may be ahead, it also poses the highest risk of a peak [7].

I do want to get the government shutdown into this conversation because markets so far don't look that concerned. We're not getting the economic data that we love to dig into. But I am curious what this means for the Federal Reserve.We have a policy meeting coming up on the 29th. It looks like we're not going to get the CPI release that we were or the inflation release we're expecting next week. We know the jobs market has been delayed when it comes to that official NFP release.When it comes to making polic ...

Core Viewpoint - The dollar index is experiencing downward pressure due to falling U.S. interest rates and rising debt levels, indicating that it has not yet found a bottom [1][2]. Group 1: Dollar Index Performance - The dollar index was trading at 97.77 on July 21, 2025, and has shown little movement over the past two months, with potential for lower lows as U.S. rates decline [2]. - The dollar index has declined 12.5% from a high of 110.17 on January 13, 2025, to a low of 96.37 on July 1, 2025 [3]. - Since July 24, the index has consolidated within a range of 96.22 to 100.26, currently around 97.50, close to critical technical support at 96.22 [4]. Group 2: Interest Rate Dynamics - The interest rate differential between the U.S. dollar and the euro significantly influences the dollar index, with the euro making up 57.6% of the index [5]. - The Federal Reserve cut the short-term Fed Funds Rate by 25 basis points to a midpoint of 4.125% during the September 18 FOMC meeting, with expectations for further reductions due to rising unemployment and low inflation [5][6]. - The Fed is likely to continue reducing rates, influenced by the upcoming appointment of a new Chairman in early 2026, which may align with the administration's preference for lower short-term rates [7][8].

Group 1 - Inflation reached highs not seen since the early 1980s three years ago, prompting the Federal Reserve to increase the funds rate to 3.25% as part of a rapid tightening cycle [1] - The tightening cycle by the Fed is noted as one of the fastest in decades, indicating significant shifts in monetary policy [1] Group 2 - The article does not provide specific insights or analysis related to companies or industries, focusing instead on general economic conditions and monetary policy [2][3]