The federal fiscal year ended last month, and while we’re still awaiting official figures from the Treasury, the CBO estimates that the U.S. ran a budget deficit of roughly $1.993 trillion in FY2026. That adds to a national debt burden that has climbed rapidly since the start of the century and now stands above $40 trillion, which has become a major concern for fixed income investors.… Read More
If the first quarter of 2026 was defined by the war in Iran, and the second quarter by strong tech and AI-related earnings, then the third quarter was defined by the Fed’s decision to hike interest rates by 25bps for the first time since 2023.… Read More
September’s flash PMIs delivered a strong signal on global growth, with activity accelerating across several major economies. The U.S. composite PMI rose to 58.4, its highest since July 2021, while the eurozone composite climbed to 53.1, the strongest reading since April 2023.… Read More
Last week, several leading AI executives called for a slowdown in development, citing concerns that increasingly powerful models could eventually pose significant risks if left unchecked. While the debate has focused on whether companies will continue to develop AI, last week’s 25bp rate hike also raises the question of whether they can continue to fund the AI race.… Read More
Last week, the European Central Bank (ECB) hiked interest rates by 25bps. The rate hike was unanimous amongst the ECB’s Governing Council and was widely expected by markets, with all eyes now focused on whether they will deliver another rate hike in either of their two remaining meetings this year.… Read More
On the surface, the U.S. labor market remains remarkably strong. The unemployment rate held at just 4.1% in August, lower than it has been 88% of the time over the past 50 years. Yet despite this apparent tightness, wage pressures continue to fade.… Read More
Despite bouts of volatility, markets have been supported by solid economic activity and strong earnings growth throughout 2026. As a result, high yield spreads have narrowed to extremely tight levels, now sitting in the 4th percentile versus history. At the same time, the high yield market has seen a recent uptick in the default rate over the last 12months, currently sitting at 2.0%.… Read More
Semiconductor stocks have faced another bout of volatility, down 20.3% since their peak on June 22, as investors weigh elevated expectations against questions around the sustainability and returns of the AI-related capex. However, sharp swings are nothing new for the sector.… Read More
It is becoming more difficult for investors to find ways to diversify away from AI exposure as it commands a growing share of public and private markets. Hyperscalers, with a seemingly never-ending appetite for fresh capital, have tapped nearly every corner of the capital markets – raising both equity and debt – to fund the AI capex buildout.… Read More
While the Federal Reserve held rates steady at the July meeting, the 9–3 vote made it clear that the committee isn’t fully aligned and hasn’t closed the door on tightening later this year. Committee members Hammack, Kashkari and Logan dissented in favor of a 25 bp hike.… Read More