August 29
Today’s Peak Digest
An op-ed at The Burning Platform cited Ludwig von Mises and stated that U.S. national debt has exceeded $40 trillion, increasing by $13.4 billion daily since July. The author argued that the official 4.1% unemployment rate excludes 106 million working-age Americans outside the labor force and that the Ludwig Institute’s functional unemployment measure stands at 24.9%.
Russian Foreign Ministry spokeswoman Maria Zakharova stated that British military facilities in Ukraine and elsewhere are legitimate targets following Britain’s plan to transfer technology for Ukrainian production of Storm Shadow missiles. She urged UK residents to consider the consequences of the policy. Britain’s Ministry of Defence said it stands with Ukraine.
Doug Noland Weekly
The Fed Chair delivered an impressive presentation at Jackson Hole. Consistent with hawkish messaging, two-year yields popped a quick eight bps to 4.31%. The yield curve flattened notably, with 30-year yields declining four bps to 5.15% (10-yr yield down 2bps).
The rates market went from pricing 35% probability of a rate increase at the September 16th meeting to 60%, with odds for a hike by October 28th jumping to 92% (from 62%). The market is now pricing two 25 bps increases by next March – with short rates forecast back above 4%.
Mkts 2Y 10Y 30Y
S&P500 increased 0.5% (up 12.7% y-t-d)
Two-year government yields jumped 11 bps to 4.34% (up 87bps y-t-d).
Ten-year Treasury yields slipped two bps to 4.72% (up 55bps).
Long bond yields declined six bps to 5.21% (up 37bps).
News
BTC is $78,100 vs $77,823 on Friday | 10:49 Sat
Economic data: Employment Situation report and ISM PMIs
Crude oil fell to $83.4 a barrel on Friday, extending weekly losses to about 4%
Europe Heads Into Winter With Gas Storage at a Two-Decade Low | Naked
Debt Rattle
Trump announced US and Venezuela have entered into an agreement on “the biggest oil deal in world history.” The details of the contract have not been released, though there has been a lot of online chatter over the last couple of days. Currently, proceeds of Venezuelan oil sales go into a U.S. Treasury–supervised account, and Rubio and Treasury Secretary Scott Bessent control disbursement.
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