Excess Returns · Friday, July 3, 2026
The narrative around the Federal Reserve's credibility has shifted significantly from a year ago, with current trends showing positive gains. However, an analyst points out that the "rate of change is unsustainable," likening it to a 2% daily increase that cannot continue indefinitely. This suggests that the market's pricing of future outcomes may become problematic if the current trajectory persists.
“Losing credibility narrative has gone away from this time a year ago, and the gaining credibility narrative, the dark blue on this on this app, it's now positive.”
“The issue is the rate of change is unsustainable, right? Like how much longer can you keep going up at a 2% per day, right? That is not sustainable.”