Marketplace The great decoupling
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Dec 9, 2025 
Justin Ho, a Marketplace reporter, delves into how medium-term Treasury yields indicate the Fed's expectations for interest rates and economic growth. Kristen Schwab explores the retail sector's 'great decoupling,' where automation leads to job cuts despite rising revenues. The discussion also touches on emerging AI finance terms that signal an impending bubble burst, and the rising optimism among small business owners amid economic uncertainty. These insights reveal the shifting dynamics in today’s market.
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Belly Of The Curve Predicts Fed Path
- The belly of the Treasury yield curve (2–5 year) signals investor expectations about Fed policy in the medium term.
- Recent easing in demand there suggests markets think rate cuts may be fewer and that neutral rates could stay elevated.
Growth Could Limit Rate Cuts
- If growth and inflation pick up, the Fed will likely cut rates less than markets expect.
- That dynamic is why belly yields imply only a couple of cuts and a lingering neutral rate.
AI Bubble Brings New Jargon Risk
- An AI-financing bubble would bring its own jargon as risky funding spreads through shadow structures.
- Terms like SPVs, private credit, and neoclouds mask concentrated leverage and contagion risk in AI buildouts.