by diastole-admin | Aug 31, 2026 | Uncategorized
We begin where we left off last week, with internal government strife about interest rates. You will remember that Treasury Secretary Scott Bessent initiated a program to buy back Treasury bonds, hoping to push prices higher and yields lower (which would help the government make its bond-interest payments). This came shortly after Bessent instructed the Treasury to purchase billions in Japanese yen, hoping to prop up the currency of one of the Treasury’s biggest foreign buyers of its bonds. It worked, briefly. Still with me?
Then newly minted Federal Reserve Chairman Kevin Warsh held his first press conference and reiterated that the Fed’s inflation target is 2% – the same as it was under Jerome Powell’s Fed. On Friday, Bessent spoke again, this time from the Fed’s Jackson Hole retreat, and emphasized that inflation has to come down from current levels. One infers from his statements that interest rate hike(s) are coming. Not what Bessent wants to see. The odds of a September rate hike jumped from 35% to 58% on Friday.
Also on Friday, stocks fell following Warsh’s remarks. Ever since the federal debt reached $40 trillion recently, investors are more concerned about it, and higher rates make it harder to pay the interest we owe. (Current debt equals about $117,000 per American citizen.) And we must say again, higher interest rates reward lenders (bond owners) and lower interest rates reward borrowers (the U.S. government, through its issued bonds, notes, etc.).
Historically, Treasurys have been considered the ultimate safe investment. But as the U.S. debt grows, fewer foreign countries and institutions are buying the debt instruments. They are no longer paying a price premium for Treasurys (meaning that Treasury interest rates are lower than comparable investments). Now they want yield, and it’s possible that Kevin Warsh is about to give it to them.
It’s not just interest rates we’re watching. There is also interest-rates’ close relative: inflation. Prices are high and are expected to rise even higher. Fertilizer and fuel are both negatively affected by wars in Ukraine and Iran. There go crop prices. Ukraine used to be a major wheat exporter – now disrupted, while domestic corn is suffering under a season of bad weather. Corn is a major animal feed, so there go prices of beef, chicken, and eggs. J.P. Morgan has announced that it expects food prices to grow at a 5% rate in the first half of 2027. That’s on top of all of the inflation we’ve already seen.
The U.S. has come to an agreement with Venezuela for an ownership stake in Venezuelan oil. While this sounds like a good thing for the price of oil, Ron Insana of CNBC just said that it will take five to ten years and about $2 trillion dollars to get the oil pumping. While the benefit of the oil is likely to go to Big Oil companies, the costs may just go to the American taxpayer. The oil infrastructure of Venezuela is in poor shape.
Oil in China is another story. According to the Wall Street Journal, China’s oil reserves in 2025 probably exceeded those in the U.S. by nearly 600 million barrels. So, as the war in Iran messes with oil deliveries, China is in a good position to withstand the upheaval. And as we pointed out recently, China is developing an Arctic trade route to Europe, which will coincidentally take its ships right past Russia, from whom it buys quite a lot of oil.
The stock markets were mixed last week, on a seesaw only they can see. But for the year, the market indices are still positive. That doesn’t mean that all stocks are up. Big tech stocks – both AI hyperscalers like Amazon, Microsoft, Google, and Meta, and AI infrastructure mavens like Nvidia – are moving markets. It tends to be hyperscalers one day and chip manufacturers the next day. Meanwhile, value stocks, which are old-fashioned manufacturing and dividend-paying stocks, are also having a moment. Asset allocation, people! You must carefully allocate your assets to various classes and sectors so that you have exposure to what’s going up as well as what might be weakening. Diastole can help.
For the week ending on August 28th, the Standard & Poor’s 500 finished at 7,711, the Nasdaq Composite Index at 26,402, and the Dow Jones Industrials at 53,559. The yield on the ten-year Treasury Note closed at 4.72%. U.S. crude oil cost $85.81 per barrel, N.Y. crude cost $4,455.50 per ounce, and one Euro was worth $1.16.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here were gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Morning Brew, Barron’s, USA Today, The Wall Street Journal, The Economist, Axios, Bloomberg, AP, CNN, Fortune, NASA, The New York Times, Business Insider, and Reuters. If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com. Thanks for reading!
Are you a basketball fan? And are you wondering if 41-year-old LeBron James is ever going to retire? Well, one reason why he’s still hard at work (now in Philadelphia) may be that in 2018 he borrowed almost $300 million against his future earnings – payable in 2049. Superstars – they’re just like us! They’re deep in debt!
by diastole-admin | Aug 24, 2026 | Uncategorized
Treasury Secretary Scott Bessent and Federal Reserve Chairman Kevin Warsh are now on a fiscal collision course. Warsh, at the latest Fed meeting, discussed how market interest rates could do the heavy lifting of bringing inflation down. He thought that as yields rose organically, natural tightening would occur, causing lower prices. Although no one was really excited about his refusal to discuss where inflation might be going near-term, we did see that bond yields were rising organically, perhaps obviating the need for a Fed rate hike.
But Treasury Secretary Bessent apparently didn’t get the memo. Last week, as Treasury yields were rising in the marketplace – which makes sense, because we have to attract buyers to our Treasurys, Bessent announced a large purchase of Treasurys by the Treasury. Four billion dollars spent to buy Treasurys naturally pushed prices higher and yields lower. This is what Bessent wanted, so that the government would pay less on the multitude of Treasury instruments that it has to auction to support our always-growing deficit and debt.
After Bessent’s announcement, bond yields initially fell but then recovered. So apparently $4 billion wasn’t enough to keep markets moved. Bessent is now hinting that he may buy more than $4 billion going forward. Kevin Warsh may have something to say about that.
And, in a related story, the total federal debt surpassed $40 trillion for the first time last week. Bessent said it was no big deal and that we were going to grow our way out of the debt. But with new tariffs on Canadian goods and energy due to start in a few months, inflation may remain elevated, and thus so will bond yields and the other parts of the economy that are priced relative to Treasurys – like mortgage and CD rates. Just FYI, the government’s debt ceiling stands at $41.1 trillion, and the debt is growing at about $100 billion each week.
The new Canadian tariffs are the result of a breakdown of trade talks between the U.S. and our neighbor to the north. Canada’s Prime Minister Mark Carney vowed to retaliate with tariffs of his own. Lest you think this will not hit everyone, know that Canada is our number one trading partner (ahead of China) and supplies 99% of our natural gas imports, 85% of our electricity imports, and 60% of our crude oil imports. To say nothing of the agricultural and manufacturing goods that we need.
While we’ve been focused on the price of crude oil and how it has risen as the Strait of Hormuz AND the Red Sea are partially blockaded, we forgot about diesel. It has now reached more than $181 per barrel (versus American crude oil around $84), and the effects of diesel at or above five dollars a gallon are just now spreading through the economy. Practically everything we eat or buy depends on diesel to get to us. Except AI. AI needs electricity. Electricity is created by burning coal, or using natural gas, or renewables. So – diesel isn’t used for creating coal, but for sure it’s used to truck that coal around.
The good news last week came from the pharmaceutical company Moderna and its partner Merck. Moderna became only the second company in the past 25 years to gain more than 100% in one day. Why? Moderna announced a new mRNA vaccine for cancer that uses patients’ own chemistry to personalize treatment. Initially it was announced for fighting melanoma, but no doubt it will be tested on other serious cancers.
The latest official Personal Consumption Expenditures (PCE) price index report for June of 2026 showed headline inflation at 3.7% year over year, and core inflation (minus food and energy) at 3.3%. Our next crumbs of wisdom from the Fed will come from its Jackson Hole meeting later this week. Chairman Warsh will speak and hopefully say something useful.
Here’s a little fact that you can use the next opportunity you have to time travel backward to 2010 or so. According to Wamsi Mohan of Bank of America, “Under Tim Cook, Apple has created market cap growth at a rate of roughly $32 million an hour, every hour, for nearly 15 years or a total of $4.5 trillion overall.” Oh, I wish I had a time machine like yours!
For the week ending on August 21st, the Standard & Poor’s 500 finished at 7,674, the Nasdaq Composite at 26,180, and the Dow Jones Industrial Average at 53,277. The yield on the ten-year Treasury was higher at 4.738%. U.S. crude oil cost $85.58 per barrel, N.Y. gold cost $4,622.70 per ounce, and one Euro was worth $1.17.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here was gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Morning Brew, Barron’s Yahoo Finance, CNBC, The Wall Street Journal, USA Today, Axios, CNN, Bloomberg, Fortune, Business Insider, The U.S. Bureau of Economic Analysis, AP, ABC News, The Guardian, and Reuters. If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com. Thank you for reading!
Today, August 24th, is the most popular day of the year for U.S. employees to call in sick. I’m wondering if it has something to do with the proximity of Labor Day? Although Labor Day is late this year, if you were going to take off two weeks, it would start today! The second most popular day to call in sick is February 13th, which is often the day after the Super Bowl. Go on! They’re small! Take both!
by diastole-admin | Aug 17, 2026 | Uncategorized
Is it just me, or does the news seem to be on a rinse and repeat cycle? Stocks are near record highs, bond yields are climbing slowly, and the K-shaped economy continues.
Inflation data released last week left investors mildly encouraged about the future. On Wednesday, the Consumer Price Index (CPI) was released, and showed a 3.4% rise in prices over the trailing-twelve months. That’s still well above targets, but it was lower than June’s 3.5% annualized rate. Core CPI, which excludes food and energy, rose 2.5% annualized.
The Producer Price Index (PPI), which measures wholesale inflation, was flat in July. For the trailing twelve months, the PPI was up 4.7%. It’s no wonder that the goods we are buying are ever more expensive.
I saw this morning that the price of a pound of ground beef has reached $10 in parts of the country. In a related story, more and more families are buying their groceries and necessities on credit cards. This is unsustainable. Total credit card indebtedness by Americans is now $1.26 trillion. That’s not as big as the national debt (soon to hit $40 trillion), but it’s still huge. No matter how low we get the inflation rate, it is unlikely to turn negative, so we will not see prices fall, we will just see them rise more slowly. And all of the inflation we’ve seen since Covid is still in the system.
Luckily, we are not in an avian-flu outbreak, and chicken remains a more-affordable protein source. It is in plentiful supply, and many consumers are switching from beef to chicken.
The Congressional Budget Office predicts that the number of people over 65 will outnumber the group that is under 18 for the first time in U.S. history by 2030. This is problematic for many reasons. The older cohort tends to take money from the government (social security and Medicare, despite being your own paid-in money, hits the federal budget like an expense) while the younger cohort is just beginning to pay in. Immigrants have always filled the gap, but now we have an anti-immigrant administration. What will happen? We will have to reverse course on immigration, or cut benefits, or raise taxes, or all of the above..
If you’re living in Manhattan, you probably already know that rents are expensive. But with a drop in available listings, rents are getting even worse. The median rent on new Manhattan leases is more than $5,000 per month. That’s 6.4% higher than last year. Shelter prices nationwide rose by 3.2% over the last twelve months. The median home price is the U.S. has risen to $434,100 – near the record high. Existing home sales were down 1.7% in July.
You may not be aware that one of our greatest national resources is foreign college students. They bring welcome diversity, revenue, and the opportunity to keep gifted workers at graduation. But this year, foreign student enrollment dropped 17% for the school year just finished.
U.S. retail sales fell in July by 0.6%, as people cut back on online shopping and buying cars.
Transit for oil tankers through the Strait of Hormuz has dropped to near zero, and a senior Iranian source said last week that there was no progress in talks to extend or build on the June cease-fire.
In what must be a related story, China has announced that it is opening the first regular cargo route through the Arctic. For now, it says that it will send cargo ships by the northern pass (up the east coast of Asia, turn left above Russia, and eventually reach Europe). But if I were China, it would be hard to resist collecting some oil from Russia on the return trip. We will see.
For the week ending on August 14th, the Standard & Poor’s 500 finished at 7,785, the Nasdaq Composite Index at 26,729, and the Dow Jones Industrials at 53,732. The yield on the ten-year Treasury closed at 4.696%. U.S. crude oil cost $82.40 per barrel, while N.Y. gold cost $4,390.00 per ounce, and one Euro was worth $1.16.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information were gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Yahoo Finance, Barron’s, The Wall Street Journal, Axios, CNBC, The Bureau of Labor Statistics, USA Today, Bloomberg, The Hustle, IBKR, Fortune, AP, and Reuters. If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com. Thank you for reading!
July was the hottest month on record for the contiguous United States. Temperatures averaged 76.89 degrees Fahrenheit, topping the previous record of 76.77 degrees Fahrenheit set in July 1936. One might almost want to take the China route home from work when things are this hot. But at the same time, the American Heart Association says that up to five cups of coffee each day are safe for most adults and might even improve cardiac health. What to do?
by diastole-admin | Aug 10, 2026 | Uncategorized
A short Comment, I’m afraid. I’m a little under the weather and my brain is working in slow motion. My apologies!
This week we have two inflation readings to anticipate. The Consumer Price Index (CPI) will be released on Wednesday, followed by the Producer Price Index (PPI) on Thursday.
But first, let’s talk about the July jobs report which came out on Friday. The U.S. economy unexpectedly lost 23,000 jobs in July, while the unemployment rate fell from 4.2% to 4.1%. A net positive 100,000 jobs were expected. Two prior months were also revised downward by a total of more than 100,000 jobs. Why did the unemployment rate fall? Over 260,000 workers left the labor force. Also of interest, the share of national income that goes to labor dropped to a new low this year.
Stocks are still at or near record highs – largely because the weak jobs report supports a Fed that sits on rates instead raising them. At the same time, it raises the specter of stagflation, where the economy slows (i.e. jobs) and inflation rises. Stay tuned.
The U.S. government department of the Treasury bought billions of dollars’ worth of Japanese yen, which has been sliding in value. Because we are nice? No! Because we don’t want the Japanese government to have to sell any of its holdings in U.S. Treasurys to boost the yen.
For the week ending on August 7th, the Standard & Poor’s 500 finished at 7,757, the Nasdaq Composite Index at 26.690, and the Dow Jones Industrials at 54,036. The yield on the ten-year Treasury Note closed at 4.660%. U.S. crude oil cost $78.18 per barrel, N.Y. gold cost $4.345.00 per ounce, and one Euro was worth $1.16.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here was gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Yahoo Finance, Barron’s, The Wall Street Journal, Morning Brew, Fortune, Axios, Bloomberg, The Washington Post, and the New York Post. If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com. Thanks for reading!
If you think that fine dining is perfect except that you have to wear clothes, then there’s a restaurant for you in Florida. C.L.A.S.S. Steakhouse Soiree in Hollywood now offers dining in the nude on the first Monday of every month. (The service staff remains clothed.) The cost, which includes a lavish meal plus champagne, costs $250 per man and $150 per woman. Please don’t make me explain why.
