Articles Tagged: vix

4 articles found

After Jackson Hole: What Powell’s Rate‑Cut Signal Means for Bonds, Yields and Investor Playbooks

Federal Reserve Chair Jerome Powell used Jackson Hole to underscore a data‑contingent shift: if labor‑market risks continue to build and tariff‑related price effects prove to be a one‑time level shift rather than persistent inflation, policy easing is on the table. His comments that “the shifting balance of risks may warrant adjusting our policy stance” and that policy is “not on a preset course” re‑anchored the front end of the Treasury curve and boosted risk appetite, according to BBC and NPR reporting. Equities rallied into the close of his speech, with volatility easing and cyclicals firming alongside mega‑cap tech—consistent with a lower expected discount‑rate path. Market pricing corroborates the pivot. The effective fed funds rate is 4.33% for July (FRED), while the 2‑year Treasury is 3.68% and the 10‑year is 4.26% as of Aug 22 (U.S. Treasury). The 10s–2s spread has re‑steepened to roughly +58 bps and has held positive through mid‑to‑late August, per FMP’s 10y–2y spread series and Treasury yields. Over the last 30 trading days, major benchmarks advanced—SPY +3.3%, QQQ +2.8%, Dow +2.6%, and small‑caps (IWM) +5.2%—while TLT rose ~1.7% and GLD gained ~0.8% (Yahoo Finance). The VIX fell from ~17 to ~14, signaling easier financial conditions (Yahoo Finance). This piece examines the curve mechanics behind Powell’s signal, policy implications, cross‑asset impacts, and portfolio positioning for a data‑dependent glide path.

Federal ReserveJerome PowellJackson Hole+15 more

AI Euphoria Meets Earnings Gravity: Will the AI Bubble Pop or Deflate Gracefully?

A week that began with a 26% collapse in C3.ai and a 20% drop in CoreWeave ended with the Nasdaq 100 flirting with record highs, underscoring the tension that now defines artificial intelligence investing. As of Friday’s close, the S&P 500 (SPY) finished at $645.31 and the Nasdaq 100 (QQQ) at $571.97, while Nvidia (NVDA) advanced to $177.99, per Yahoo Finance. The volatility backdrop eased, with the VIX at 14.22, also according to Yahoo Finance. The macro backdrop remains supportive: the 10-year Treasury yield sits at 4.26% and the 2-year at 3.68%, a positive 58-basis-point 10y–2y spread that marks a decisive exit from inversion, per U.S. Treasury data. The effective fed funds rate is 4.33% and unemployment is 4.2% (July), while real GDP is running near $30.33 trillion SAAR in Q2, according to FRED. That policy and liquidity cushion, however, is being tested by uneven AI monetization and timing risks. C3.ai’s CEO called preliminary sales “completely unacceptable,” while CoreWeave’s wider-than-expected loss hit sentiment ahead of its lock-up expiration even as it raised 2025 revenue guidance and highlighted a $30.1 billion backlog, CNBC reported. At the same time, cash-rich incumbents continue to execute: Cisco posted a narrow beat with strong AI infrastructure orders, and Foxconn reported a 27% profit jump as AI servers climbed to 41% of revenue, per CNBC. The result is a market where index-level optimism coexists with stock-specific air pockets—making backlog conversion, margins, and balance sheet strength the critical differentiators.

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What Bond Markets Are Saying About the Fed: Yield Curve, Inflation Signals, and a Playbook for Investors

U.S. bond markets have pivoted in the wake of Chair Jerome Powell’s Jackson Hole remarks, with the Treasury curve re-steepening as front-end yields drift lower and long-end term premium re-emerges. As of August 22, 2025, the 10-year Treasury yield is 4.26% and the 2-year is 3.68% (U.S. Treasury), putting the 10s–2s spread near +58 basis points, per FRED’s T10Y2Y. Market-implied inflation remains anchored: the 5-year breakeven is 2.48% and the 10-year is 2.41%, while the 10-year TIPS real yield is about 1.94% (FRED). The effective federal funds rate stands at 4.33% for July (FRED), still restrictive by historical standards. Equities have responded with improving breadth and lower volatility, and long-duration bond proxies have stabilized as real yields level off (Yahoo Finance).

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The Labor Market’s Slow Rebalancing: Wage Disinflation Meets a Normalizing Yield Curve

The multi-asset snapshot now points to a cooler but resilient growth backdrop with disinflation traction and a yield curve that has turned positively sloped. As of Friday’s close, SPY was 643.44 and QQQ 577.34, with DIA at 449.53 and IWM at 227.13; developed ex-U.S. (EFA) sat at 92.19 and EM (EEM) at 49.94, according to Yahoo Finance. Treasury yields reflect a normalized curve: 2Y 3.75%, 5Y 3.85%, 10Y 4.33%, and 30Y 4.92% (U.S. Treasury, 2025-08-15), leaving 2s10s at +58 bps and 2s30s at +117 bps. Market-based inflation expectations remain anchored with 5y breakeven at ~2.42%, 10y at ~2.38%, and 5y5y forward near ~2.34% (FRED). Headline PCE inflation was ~2.6% YoY in June, with core PCE ~2.8% YoY, and CPI in July at ~2.7% (core ~3.0%) (FRED/BEA). The unemployment rate is near 4.2% with prime-age employment still elevated and wage growth easing toward high-3%s (BLS/FRED). Volatility is subdued in equities (VIX ~15–16) but episodic in rates (MOVE recently eased after spikes) per Yahoo Finance and FRED. The July FOMC statement emphasized balanced risks and data dependence; the SEP medians still show disinflation progressing toward 2% and the policy rate drifting toward the mid-3s over the next two years (Federal Reserve/FOMC).

labor marketwage disinflationyield curve+15 more