Markets Plus Macro Horizons: Exiting August
Aug 27, 2025
The podcast dives into the U.S. rates market, examining trading ranges influenced by economic shifts and data releases. Insights on market sentiment before Powell's Jackson Hole speech reveal apprehensions amid rising jobless claims. Political pressures and a DOJ investigation shape perceptions of the Federal Reserve's strategy. The spotlight turns to inflation-protected securities as interest in treasury auctions rises, while discussions emphasize how stock market changes won't sway Fed policies. Key upcoming indicators are anticipated as September looms.
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Market Awaits August Data
- The market is waiting on August data (NFP, CPI) to price the probability of a September Fed cut.
- Fed may signal dovishness by adding another cut to 2025 in the dot plot rather than a single large cut now.
Equities Feed Into Policy And Treasury Demand
- The equity market can influence the real economy via the wealth effect and thus affect Fed decisions.
- Treasury demand concerns faded after August refunding tails didn't trigger sustained selloffs.
Adopt A Dip‑Buying Bias
- Favor dip buying in the near term while watching the 100-day moving average support for 10-year yields.
- Expect neutral positioning with a steepening bias but limited scope for a material bearish repricing.