I’ve honestly never really understood what the phrase ‘It’s like ‘Groundhog Day’, nor do I really think I need to know it in depth. The 30,000 foot explanation is that the same thing keeps happening every day. If I were asked to describe the world markets and the economy exists in, that’s the phrase that I think applies. I’d be hiding in my hole too, little buddy. Source: Creative Common First off, the broad markets like the S&P 500 (blue), Dow Jones Industrial Average (yellow), and the NASDAQ (green) are all holding up nicely over the past 12 months. I think most anyone would take high teens returns given the backdrop and noise being produced. Source: Yahoo Finance Newly seated Federal Reserve Chair Kevin Warsh has set a pragmatic tone out of the gate. While the president who appointed him threatened to ‘sue’ if he didn’t lower interest rates, it is now somewhat expected that the next move is higher. And while I am but a lowly poli sci/business major from a little public school on the pacific, I think that’s the right call given the inflationary issues of the day. This reading is from June 17th, 2026. The current federal funds rate is 3.5% to 3.75% and a projection to 4.0% isn’t much of a higher one. Source: Federal Reserve That said, I believe them to be both daft and foolish to think that these charts at all warrant lower long term rates. Has inflation really gone down as is commonly voiced? Probably not, the rate at which inflation is growing has slowed and it’s coming off a blast higher. Source: Federal Reserve This is what said blast looks like from the Federal Reserve standpoint of assets held on their books. Compare this to the Global Financial Crisis reaction of 2009. It’s a drop in the bucket. Source: Federal Reserve And I would say that flooding the system with money and dropping rates to virtually zero is the reason I think there is such a pig in the python. I think they waited too long, and I would take a similar approach if I thought my policies could have impacted inflation this much. Keep in mind, that is my opinion. If you owned hard assets, or soft ones as well, you may be looking pretty good right now. Like possibly really pretty good especially if you owned a home, or maybe several homes as it seems most of my rich friends do. Source: Federal Reserve Which brings me to this, my bi-partisan rant against those who run the legislative and executive branch of the government. For the love of God, please stop telling the American public that you somehow have a plan for the inflation beat down that is being administered. One that in part you guys caused. I’m 54 and I can’t afford this crap either. Stop promising what you can’t deliver on. Somone out there might actually believe it. But it’s not that kid, and it’s not me either. Source: Creative Common Back to markets and asset classes. Like I said in the beginning, after all the noise goes away, and you are down to signal, not much has changed in the corporate bond market in the past two years. Aggregates rates for AAA paper have averaged 5.0%, with slight bias to 5.5%. If you have a major balance sheet, with major bond tranches out there, the markets are basically saying you are okay. You are money good. Source: Federal Reserve Oh wait, it gets better. The spread, meaning the yield difference between the highest rated corporate bonds and those rated several rungs lower is a whopping 0.80%. That’s right, less than a full percentage. This may suggest health in the underlying cash flow of companies and there may be confidence in the ability for a company to pay the debt and dividend you owe. Source: Federal Reserve Let me tell you one thing that may not look great for some, but could be good for the rest of us, is that the fever might have finally broke on the white hot rally in semiconductors. This is Micron, a memory chip maker tied to the AI data center buildout.
Previous to this it was a boring producer of chips for personal computers. On the day of this writing (7/25/26) the stock was down 7.0%. From the peak, it’s down around 25%. After these changes in the market, people may have started to lose money in what was once a situation where some thought money could seemingly not be lost. That’s how bubbles, if this is one, pop. Source: Yahoo Finance I think it’s a good thing for the overall market because it lets some steam off. When other companies can pick up the slack and the leadership broadens out, it can suggest we are good in other places as well
On that subject, in my mind the pressure is building in terms of global theatrics that are emanating from the United States. I don’t think the vast unwashed masses in this country can take more rounds of higher fuel prices. Prices that are elevated due to a ‘war’ that doesn’t seem very ‘warlike’. And that’s just the start of it all. I don’t think any of us signed up for this. Source: Yahoo Finance People get elected and sometimes peace follows, and sometimes chaos does. About a week ago when my mother and I were marinating ice cubes in the backyard I said this….’I think people could take AI, or they could take the chaos in D.C., but they couldn’t take both.’ That’s a lot for the comfort blanket of assets and portfolio values to absorb.
And then I reflected on the idea to only focus on the things I can control. Took me to a memory of my favorite childhood TV broadcaster. At the end of his segment, he would sign off with…’If you don’t like the news, go out and make some of your own!’ To a kid growing up in the San Francisco Bay Area in the 1980s, that was a beautiful way to live. See you soon, fellow Dolphins. Source: Creative Common