BREAKING: President Trump asks Jerome Powell to LOWER INTEREST RATES IMMEDIATELY to save the economy.
"He should be dropping interest rates IMMEDIATELY," Source: Bull Theory @BullTheoryio
For the first time this year a 2026 rate cut is no longer fully priced
We are witnessing pronounced increases at the front-end of the US yield curve as doubts grew about the Fed’s ability to cut rates this year, even under a new Chair. There are now just 20bps of cuts priced in by the December meeting, meaning that for the first time this year a 2026 rate cut is no longer fully priced. Instead, investors have to look as far out as the June 2027 meeting for the first fully priced cut. Source: CME Fed Watch Tool
Financial stocks this year
- Blue Owl: -44% - Blackstone: -35% - Wells Fargo: -21% - Morgan Stanley: -15% - BlackRock: -15% - Goldman Sachs: -14% - JPMorgan: -13% $OWL $BX $WFC $MS $BLK $GS $JPM Source: Phil Rosen @philrosenn
Speed Matters in Credit Market Downturns
When credit markets unwind, timing is crucial. JPMorgan Chase, with its conservative private credit practices, may be among the first to reduce exposure and trigger margin calls. Early movers often limit losses, as seen with Goldman Sachs versus Credit Suisse during the Archegos collapse, where slow reaction cost Credit Suisse $5.5 billion. Credit cycles punish slow responses, not analysis. As leverage rises and growth slows, the key question is: which banks will be last to adjust? JPMorgan may demand more collateral on private credit loans, signaling declining collateral values since origination. Source: Desiree Fixler @desireefixler
The cost of downside protection is near the most expensive levels on record.
Source: The Chart Report @TheChartReport
Citadel’s Global Fixed Income fund and Taula are among the hedge funds worst hit by last week’s market turmoil, while D.E. Shaw & Co.’s two main vehicles were a rare bright spot in the industry.
Here's all the latest numbers collected by Nishant Kumar @nishantkumar07 / Bloomberg
A toxic cocktail for financial markets?
1) Iran war put downward pressure on global economic growth and upward pressure on global inflation: 2) US labor market continues to weaken 3) The Fed has less leeway to cut rates because of rising inflationary pressure (and despite weakening labor market and weakening growth) 4) Some investors start to lose confidence in some Private Credit Funds as banks are forced to mark down their bad credit exposure. All of them are manageable separately. But the mix is not easy to deal with...
U.S. Presidents on Fiscal Responsibility
“The Federal Government cannot continue to spend more money than it takes in.” – Jimmy Carter (1978) “For decades we have piled deficit upon deficit, mortgaging our future and our children's future.” – Ronald Reagan (1981) “We must bring the Federal budget deficit under control.” – George H.W. Bush (1989) “We must put our fiscal house in order.” – Bill Clinton (1993) “We can pay down a large portion of the national debt.” – George W. Bush (2001) “Families across the country are tightening their belts … the federal government should do the same.” – Barack Obama (2010) “We will start to balance our budget and pay down our debt.” – Donald Trump (2016) “My plan will reduce the deficit.” – Joe Biden (2022) “We will balance the federal budget.” – Donald Trump (2024) Charlie Bilello
