Equity returns during steepening regimes, bear steepening remains bullish equities. Bull-steepening tends to be a drag on equity returns, but by contrast bear steepening is by excess returns. Improving corporate earnings, positive outlook, should continue to push equities

A little Merle and Willie 🇺🇸 not a much better duo.

Average change in 5y5y after sustained by steepening. Tend to see light lift negligible (3bps) then fade after about 15 days.

Rate probabilities over last two FOMC meetings of the year. October right around 83% probability of a 25bps cut, and December around 70% probability of a cut. Given data still think market pricing too aggressive.

Base case continues to be bear steepening this has traditionally boded well for corporate profits. Expecting decent profit growth for remainder of 2025.

Proud to see my state SC having the second strongest RGDP growth YoY. Source: Joey Politano 🏳️‍🌈

Correlation between terminal rate (2y1m proxy) and 5y5y has broken down. Seems market is back to pricing macro headwinds and pricing out inflation risk.

Investment Landscape Remains Optimistic: Capex % GDP and depreciation and amortization as a % GDP. Extrapolating this out further at the macro level investment > consumption. k (capital per worker) is pushed upwards towards a new level. Thus y= f(k), more capital raises

Growth Accounting and Output: GDP growth is a tug-of-war between capital deepening, labor, and productivity. Since the 2000s, Capital & TFP have done the heavy lifting labor tends to be weaker. This has changed recently with labor and Capital doing most of the heavy lifting.

Not things you see during a recession Part 1: Small Cap EPS NTM earnings growth once again strengthening relative to S&P 500. Forward earnings starting to once again price relative growth for small caps.

Banks tier 1 capital ratios rising vs % banks under-capitalized. Financial sector has become much more prudent, little risk to banks currently. Rising capital helps banks mitigate losses and keep lending flowing. Right now only 3% of banks are under capitalized. Updated:

10y sensitivity to different surprises: Right now 10Y most sensitive to employment surprise. On a short-run basis every 1 unit change in employment surprise raising/lowering yields by 30bps. Total impact of 1 unit increase in inflation, employment and economic surprise has