Market CRASHING? Here Is What You Need To Know!
In a Nutshell
Oil prices above $96 and 10-year yields hitting 4.85% signal that Middle East uncertainty and inflation are forcing the Fed to consider a rate hike next week. Core CPI and PPI reports this week will determine whether the Fed pauses or tightens, and both outcomes are bearish for growth. Markets remain propped by AI stocks while the broader economy—shown by Walmart’s weak guidance—feels the pinch of higher energy costs.
These notes were generated by AI and may contain inaccuracies.
The NASDAQ market is down 0.31% with uncertainty presenting itself. The US Treasury announced a new $6 billion bond buyback in longer dated debt. Yields spiked following this announcement. The higher the yield, the higher the interest payment that the Federal Reserve pays or the US money pays on money that it borrows. Normally when you see a huge bond buyback, especially for longer dated debt, you do that in return for lower yields, but the opposite occurred.
The exact dollar amount of the bond buyback is relevant whether it was 6 billion or 30 billion. It's about the message that Best net was trying to send. The message is being rejected by the credit markets and we now have the highest 10-year yield in the past 5 years at 4.85%. The bond market is telling Treasury Secretary Best net they do not trust it. They're trading higher and there's more uncertainty.
One hour later, US oil prices are now above $96 a barrel, up 44% since July 2nd. There has been no comment from President Trump and no Iran deal is even being discussed. Today marks the 193rd day of the Iran war. According to Trump, it's not a war unless he needs it to be.
The CPI inflation report is scheduled for Friday. If the CPI inflation comes in hot on Friday, it's hard to see that the Federal Reserve will be able to justify another rate pause. The solution to bond yields, oil prices, and inflation is to pull out of Iran.
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