The Bond Market Strikes Back
Summary
Lizanne Saunders and Colin Martin analyze persistent inflation driven by AI spending and tariffs, alongside Treasury Secretary Bessent’s bond buybacks aimed at curbing yields. They discuss the resulting tension with the Fed’s mandate and the end of the "Great Moderation," noting that stocks and bonds are now positively correlated. The hosts also preview upcoming labor market data, including the jobs report and JOLTS, to gauge economic health.
Topics discussed
Introduction and latest PCE inflation data
Inflation drivers: AI, imports, and GDP impact
Treasury Secretary's bond buyback plan explained
Are current yields high? Fiscal debt context
Fed vs Treasury: Policy conflict and credibility
Market rotations and the end of Great Moderation
Trade wars, tariffs, and inflation risks
Upcoming economic data: Jobs, JOLTS, and ISM
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