"NO CUTS" IS NOW MORE LIKELY THAN 25 BPS CUT IN DECEMBER
Mid-October, it was almost a done deal Source: Kalshi @Kalshi
While we might not get any data on CPI this week, it is worth highlighting that alternative data seems to indicate a meaningful deceleration of CPI amid big drop in rents
(Note: over 33% of the inflation calculation is based on rental cost estimates). According to CoStar, there was -0.31% rent "growth" in October, his was the biggest drop in over 15 years. What is behind this sudden drop in rents? The plunge in immigration into the US, and the resultant drop in demand for rental properties. Reventure CEO Nick Gerli points out in the following thread, "the weakness in the rental market right now is alarming. It suggests there's much more deflationary pressure in housing/economy than people understand." And, as the Fed's Stephen Miran echoes now, "2026 will be a year where CPI drops" even more. But the disinflationary trend is not just visible in rents. OpenBrand, which tracks prices daily from online marketplaces, retail websites, and brick-and-mortar store listings, said price growth slowed across all groups but communications devices. Source: zerohedge
⚠️US college graduates' unemployment is now higher than during the Great Financial Crisis:
The unemployment rate for college graduates with a Bachelor's degree or higher hit 9.3%, the highest since 2021. This almost matches the 2001 recession peak of 9.5%. Source: Global Markets Investor @GlobalMktObserv
Auto loan delinquencies hit record for riskiest borrowers.
The share of subprime borrowers at least 60 days past due on their auto loans rising to 6.65% in October. Source: Bloomberg, HolgerZ
Germany creates a substantial infrastructure package and then allocate 50% of it to other purposes.
At least, that's what a study finds. Source: FT
Odds of a rate cut at Fed December meeting have increased again (70%+) but Fed officials remain divided on three questions that come down to judgment calls:
1. Will tariff-driven cost increases truly be a one-off? 2. Does weak hiring reflect a demand slump or reduced supply? 3. Are rates still restrictive?
📈 China’s Broad Money Supply Surpasses Combined U.S. and EU Since 2023
China’s broad money supply (M2) reached $39.7 trillion in September 2023, surpassing for the first time the combined total of the United States and the European Union ($39.6 trillion). By September 2025, China’s M2 had expanded further to $47.1 trillion—5.9% higher than the combined $44.5 trillion of the U.S. ($22.2 trillion) and EU ($22.3 trillion). This reflects the continued rapid expansion of China’s financial system and credit base relative to Western economies. Source: Econovis
US companies announced 153k job cuts in October, a 175% increase from a year ago.
This was the highest number of layoffs for any October in over 20 years and the most for any single month in Q4 since 2008. Source: Charlie Bilello, LSEG
