The Fed hikes quickly, borrowers feel it much more slowly...

While the Fed has hiked a lot, but most borrowing in the US is long term. Rate won't rise until this debt matures.. So while we are at short term rates we haven't seen since before the GFC, the effective interest rate for existing debt (corporates and households) is basically back to where it was before COVID The average mortgage rate is still below 4%

The internet is no longer the public square🧵 People think the internet is about free speech but that’s useless with no audience. What makes it special is the ability to work with others to build common ground. There is a reason freedom of Assembly is part of the first amendment.

Equities have sold off but this is not even close to being a cheap market ….🧵

Forward PE’s are still close to 22 and were near the highs of 2021 The entire move since Q4 of last year was predicated on Fed cuts that never came alongside AI hype.

But trailing earnings haven’t budged during the rally

Powell already pivoted but they put it in writing yesterday…

They nixed the prospect of hikes and noted they would consider cuts next (though still marginally hawkish as they noted they will not move until they see a path to 2% - makes sense given they also upgraded their view on growth and nixed worries over banking) He is no longer afraid of growth…

The stimmy keeps on coming 🍾

Inflation adjustments to social security and increases in retiree healthcare (+150bn) completely offset expiring income tax credits (-$150bn)…

Next year those two categories will rise by another $200bn yet again (~1% of GDP) with no real offset.

This is all due to a massive wave of retirees now eligible to receive government benefits… 💴 💴 💴 This is on top of all the blue wave spending proposals which added another $200bn in spending (~1% of GDP). The spending however isn’t the total as it supurred a ton of related investments.