As Treasury yields jump, changes in fiscal policy come into scrutiny. By comparing the Feb 2026 to January 2025 CBO baselines, and isolating changes due to legislation, one can identify the impact on deficits and debt arising from the changes in current law.
Reversing the pattern of declining curves, the curve has steepened since the War’s start.
The odds of the Strait of Hormuz re-opening by July 1st is at all time lows; and yet the front month (July) Brent is at only $111.
From the opinion pages of the WSJ:
Down from February, both real and nominal:
Friday’s jump in 10 year Treasury yields (10 bps), and the 30 year yield nearing 5% alarmed markets. But why?
Debt and the debt trajectory are up. Fed Chair Designate Warsh wants to shrink the Fed balance sheet, even as Trump continues his assault on Fed independence. And don’t expect the foreign sector to rush in to help…
One of the reasons why the impact of higher gasoline prices might be muted relative to the past is the increased fuel efficiency of US autos, in small part due to a higher share of electric vehicles and hybrid vehicles in the US fleet. It could’ve been larger.
Lots of gushing praise by President Trump of President Xi. Not so much from Xi. I’d characterize this as anything but tough talk from the US side. Continue reading
For Q2, GDPNow (q/q AR) is at 4%, while St Louis Fed is at 0.8%.
although they over-estimated in 2023-24.