Tiger 123
08-20

The US Treasury announced that it will double long-duration bond buybacks to at least US$4 billion per operation from September through early November. The move followed the 30-year Treasury yield reaching nearly 5.34%, its highest in almost two decades.

The result:

10-year yield → ~4.65%

30-year yield → ~5.20%

S&P 500 → +0.21%

Nasdaq → +0.16%

Dow → +0.22%.

That is meaningful relief, but I would not interpret it as the end of the bond problem. The underlying issues—US fiscal deficits, inflation and enormous AI infrastructure financing requirements—remain unresolved.

🔴 Fed — more hawkish than the market hoped

The July Fed minutes were important.

They showed that “many” policymakers believe higher rates may ultimately be required if inflation does not continue falling, while three policymakers had already voted for a 25 bp hike at the July meeting.

The current policy rate remains 3.50%–3.75%.

The Fed still looks likely to hold at the 15–16 September meeting, but markets are now pricing better-than-even odds of a rate increase by the October meeting, and a high probability of one by December if inflation remains sticky.


 Earnings — US consumer increasingly two-speed

Retail earnings reinforced the same “K-shaped” economy we have been seeing.

Target reported strong results and raised its outlook, showing resilience among consumers using value-oriented, convenience and digital offerings.

But Lowe’s cut its annual comparable-sales outlook after consumers delayed larger DIY renovations, even though professional repair demand remained resilient.

This suggests the US consumer is not collapsing, but spending is becoming increasingly selective.

Today the big earnings reads are:

Walmart → broad consumer health

Alibaba → China consumer/cloud/AI

Deere → industrial/agriculture capex

The bond-market intervention bought equities breathing room, but the Fed minutes make clear that inflation remains the central bank’s dominant concern, and Brent at US$91.42 makes that problem harder rather than easier. 


Fed Chair Warsh Speaks Tonight — Will He Give Markets a Direction?
Jackson Hole runs August 27–29, themed "Financial Innovation: Implications for Payments and Policy," with Warsh speaking 10 p.m. Beijing on the 28th. Thursday may have front-run it: QQQ +1.37%, spot gold +1.12% to $4,649, Bitcoin +2.96% to $81,370. Equities, gold and crypto rising together is a bet on liquidity and the dollar, not on any one asset's fundamentals. With payments and digital assets on the official agenda, his remarks may land harder on stablecoins than on the indices. Does he shift the rate path — and are you watching equities, gold, or BTC?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • KevinKelly
    08-20
    KevinKelly
    Deficits are still the heavier driver here. Buybacks can smooth duration for a few weeks, but who absorbs the net long-end supply once issuance keeps rebuilding?
Leave a comment
1