Filmed on September 12th, Ryan Mumy and Justin Greenhill run through what the inflation data is showing under the surface, why long-end yields keep rising even as the Fed holds, and what a tightening Brazilian election could mean for global capital flows.
In this episode:
- Inflation rising but far less broad-based than the last rate hike cycle, with energy and computer products doing most of the work
- Core CPI still well below 2022 levels despite a monthly pop
- Nominal growth vs. the two-year yield showing the Fed would be hiking into already restrictive territory
- The S&P 500 at a critical horizontal line with CTA and vol control positioning pulling in opposite directions
- Breadth signals sending conflicting readings, one flashing caution, another pointing to a potential buy zone
- The bond market pricing a 90% chance of a rate hike next week while the Fed's dot plot has yet to move
- Long-end yields rising on term premium, not Fed action, as deficit concerns build
- Dollar bulls positioned for a rally that hasn't materialized, setting up a potential unwind
- Brazil's election tightening sharply, with Flávio Bolsonaro pulling ahead and markets unwinding hedges
- Gold caught between the long-term debasement trade and near-term rate hike risk