Behind the Markets Podcast · Friday, September 25, 2026
The US economy is demonstrating considerable strength, with real rates rising by 40 basis points in the last three weeks. Despite this, inflation expectations remain stable, and GDP growth expectations are increasing. This economic resilience suggests that the Federal Reserve may need to implement multiple rate hikes, potentially two in December, to manage inflation.
“Um, the real rate is gonna up 40 basis points the last three weeks. One of the strongest increases I've ever seen. Um, inflation expectations are pretty stable. On the 5-year, 5-year inflation swaps are actually down a tad, but this is an economy that is really strong. And, um, uh, uh, you know, the expectations of GDP growth are growing up. And, um, you know, that's, I'll tell you, the feeling in the market, you take a look at, um, I'm, you know, 5:15, 5:16, and, uh, is that, well, hey, one, one rate hike isn't gonna cut it. Very clearly.”
“Um, now again, there's politics whether it's going to be in in in in October, but there's increasing feeling there may have to be then two in December, and even that might just be the beginning of stronger, uh, yields going forward.”