Treasuries are 5-10 basis points lower to start the day, providing a boost for equities ahead of the open as well (SPX futures +1.07%). Fed Vice Chair Lael Brainard went on the record yesterday saying she thinks it “will probably be appropriate soon” to slow the pace of rate hikes following four consecutive 75 bp increases. She also made clear that she doesn’t think now is the time to stop policy tightening, but perhaps more interesting was her acknowledgement of real yields moving above 1% across much of the yield curve. “That’s a big shift in a 9-month time period,” said Brainard. No argument from us or any other fixed income person on that point. There are a couple of positive articles out this morning for the peak inflation narrative. A Financial Times article notes a clearing of logjams at the ports of Los Angeles and Long Beach following an early holiday import rush, and in a rare move, Apple is offering promotional discounts for small business on Mac computers to combat a slowdown during the holiday quarter.

Jason Haley
Chief Investment Officer