Daily Alpha · Substack
· Midday Alpha · by Buzzberg Research
Chicago Fed President Austan Goolsbee says consumer sentiment has decoupled from spending, while Peter Schiff argues on QTR's Fringe Finance that the bond market now sets long-term borrowing costs.
Goolsbee: consumer sentiment has decoupled from spending, so hard data comes first
Goolsbee says the correlation between consumer sentiment and spending has become very weak, so he prioritizes rate-based labor measures and hard retail spending data; Michigan data show 53% of households in August cited higher prices as a reason they are worse off, versus a 7% average in 2019.
AI data-center capex is a possible demand-side overheating risk and a speculative valuation risk if productivity disappoints.
Source →Schiff: a 10-year yield above 5.3% shows the bond market, not the Fed, sets long rates
The article argues the 10-year Treasury yield's climb above 5.3%, a level not seen since 2002, came as labor data weakened, leaving Washington a lose-lose choice between a debt-driven contraction and inflation-inducing rate suppression.
It sees persistent upward pressure on long-term yields and a rising risk of what Schiff calls a bond market crash and currency crisis.
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