Eurodollar University HOLY SH*T! You Won’t Believe What the Fed Just Admitted
Dec 16, 2025
Jay Powell's recent press conference revealed alarming job losses of 20,000 monthly, shaking investor confidence. The Treasury curve's final form is emerging, highlighting the market's reaction to this shift. Central banks are critiqued for distorting rather than stimulating the economy. The normalization of the yield curve points to a retreat from previous policies, with recession risks flagged by the steepening 3M-10Y spread. Powell's 'cooling' rhetoric contrasts sharply with rising job risk acknowledgments, signaling greater economic uncertainty ahead.
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Fed Admits Job Losses Match Curve Signals
- The Fed publicly admitted the US has been losing about 20,000 jobs per month this summer and fall.
- Jeff Snider argues this admission aligns with the Treasury yield curve's recent steepening and is significant.
Inversion Is Market Distortion, Not Natural
- Yield curves naturally slope upward and inversion requires strong interference, typically from central banks.
- Snider says central bank actions create distortion and confusion rather than true stimulus or tightening.
Uninversion Happens In Lumpy Stages
- After inversion, the curve follows a multi-stage uninversion process that often steepens the front end first.
- Early bull steepening can see short-term rates fall while longer-term rates temporarily rise.