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Thoughts From The Divide: The Door is Wide Open

BY JON WEBB
Last week, we flagged Bill Dudley’s abrupt change of mind: he now advocates immediate rate cuts. One might be forgiven for suspecting Bill had spent the week lobbying his old colleagues because the July 31st FOMC statement, and J Powell’s subsequent presser gave rates markets quite the boost. Of course, there were the usual Powell caveats: “If we were to see, for example, inflation moving down quickly - or more or less in line with expectations - growth remains reasonably strong, and the labor market remains consistent with its current condition, then I would think that a rate cut could be on the table at the September meeting”. But judging from SOFR pricing, the market took Powell’s caveats as mere teasing. Powell’s presser comments suggested maybe 50bps of cuts by year-end, but Dec 25 SOFR pricing suggests at least 75bps. Read more →

Digesting More Big Tech Earnings, Waiting for Friday’s January PCE Report

BY TEMATICA
Meta, Microsoft, Tesla, ServiceNow, IBM, Lam Research, Caterpillar, Mastercard, and Check Point Software (to name a few) Read more →

MI2 Partners Thoughts From The Divide: Warm and Fuzzy

BY JON WEBB
Given that it’s Valentine’s Day, some of you may be feeling warm and fuzzy courtesy of a significant other. Of course, others might be married. But for those of you who are following the latest economic data, the warm fuzzy feeling may apply doubly. Consumer spending data could definitely give the impression all is right with the world if BofA’s Moynihan’s data applies across the board, “The bank’s retail customers are spending about 6% more money in the first 40 days of this year compared with the same period in 2024”. (Let’s go ahead and blame the weather/fires for the latest retail sales reading.) Read more →
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