Macro Horizons Best of 1993
Oct 24, 2025
Ian and Ben dive into the U.S. rates market, sharing insights on CPI trends and the potential impacts of tariffs on holiday pricing. They discuss the fallout from the government shutdown affecting data clarity and explore expectations for interest rate cuts. The duo analyzes the treasury market's reaction to softer inflation reports and assesses macro risks, including the trade war's impact on the economy. To lighten the mood, they wrap up with some Halloween jokes, blending market talk with a touch of humor.
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CPI Cooling Eases Inflation Fears
- September CPI surprised to the downside with core CPI +0.2% versus +0.3% expected, signaling cooling inflationary pressure.
- Core goods and services details show limited tariff pass-through and muted reflation after trade tensions.
Tariffs Partly Absorbed, Data Distortions Loom
- The hosts note producers and retailers are absorbing some tariff costs, muting consumer price effects for now.
- They warn holiday-season passthrough remains a wild card and government shutdown will distort upcoming data.
Position For Fed Cuts And Bull Steepener
- Expect a 25bp Fed rate cut in the upcoming week and another 25bp in December based on the CPI and shutdown dynamics.
- Position for a bull steepener with two-year sector outperforming and 10-year yields drifting below 4%.