Category: Market Action

The TXPR Price Index hit a new 52-week high today of 681.80, edging the previous mark of 681.51 set on 2025-9-12.

PerpetualDiscounts now yield 5.64%, equivalent to 7.33% interest at the standard conversion factor of 1.3x. Long corporates yielded 4.86% on 2025-10-8, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has narrowed to 245bp from the the 255bp reported October 1.

A new Survey of Consumer Expectations is out:

September Survey: Inflation Expectations Tick Up at Short- and Longer-Term Horizons; Labor Market Expectations Deteriorate

• Median inflation expectations increased at the one-year-ahead horizon to 3.4 percent from 3.2 percent and at the five-year-ahead horizon to 3.0 percent from 2.9 percent. They remained steady at the three-year-ahead horizon at 3.0 percent. The increase in the year-ahead measure was largest for those with at most a high school education and those with household incomes under $50,000.
• Median one-year-ahead earnings growth expectations decreased by 0.1 percentage point (ppt) to 2.4 percent in September, the lowest reading since April 2021.
• Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased 2.0 ppts to 41.1 percent.
• The mean perceived probability of losing one’s job in the next twelve months increased by 0.4 ppt to 14.9 percent, above the trailing twelve-month average of 14.1 percent.

I’ve been spending my programming time recently speeding up HIMIPref™ and stumbled across the following interesting comparison of access times for data in various places:

… which is kind of cool. Puts things in perspective! They also have L3 cache, nowadays, that services all the cores on the CPU, not just one; and even, so I am informed, L4 cache!

Which reminds me of a funny story. The nineties was an interesting time to be buying computers, which I was doing for my prior employer, since everything about them was changing at breakneck speed; performance bottlenecks were shifting kaleidoscopically every time you looked. So I read PC Magazine every month and tried to keep up with what was going on; at one point, PC Mag concluded that for computationally intensive work (like we were doing) the most usual bottleneck had become the speed of the L2 cache. If I remember correctly, the speed of the good kind at the time was 15ns.

So next time I ordered a (small) batch of computers and asked my salesman for quotes, I asked what the speed of the L2 cache was. Silence. He obviously had no idea what that was and eventually told me he’d have to call his vendor and get back to me.

We needed the order filled! So I called him up (a few days? a week?) later and asked about the speed of the L2 cache was on the machines he was quoting.

He got mad and snapped “Look, James, it’s fast, OK?”

Shortly afterwards we changed computer vendors.

On 2025-9-19, National Bank of Canada announced:

its intention to redeem, on November 15, 2025 (the “Redemption Date”), all of its outstanding $500,000,000 aggregate principal amount of 4.300% Limited Recourse Capital Notes Series 1 (Non-Viability Contingent Capital (NVCC)) (Subordinated Indebtedness) (the “Series 1 LRCNs”), at a redemption price equal to the principal amount of the Series 1 LRCNs, plus any accrued and unpaid interest up to, but excluding, the Redemption Date. Formal notice of the redemption will be delivered to registered holders of the Series 1 LRCNs in accordance with the terms outlined in the trust indenture for the Series 1 LRCNs.

In connection with the redemption of the Series 1 LRCNs, the Bank will redeem all 500,000 Non-Cumulative 5-Year Fixed Rate Reset First Preferred Shares, Series 44 (Non-Viability Contingent Capital (NVCC)) (the “Series 44 Preferred Shares”) that are held by Computershare Trust Company of Canada as trustee of NBC LRCN Limited Recourse Trust.

Since November 15, 2025 is not a business day, amounts due to holders of the Series 1 LRCNs will be paid on the first business day following that date.

The redemption of the Series 44 Preferred Shares and Series 1 LRCNs has been approved by the Office of the Superintendent of Financial Institutions and is part of the Bank’s ongoing management of its regulatory capital.

These issues are discussed on PDF pages 209 and 210 of the 2024 Annual Report – the preferreds were 4.30%+394.3 , which would imply quite a pop in interest paid to the LRCN holders if they had reset!

Thanks to Assiduous Reader DB for bringing this to my attention!

So the saviour of the BLS jobs numbers is being replaced:

The White House has sent paperwork to the Senate to withdraw the nomination of E.J. Antoni as head of the Bureau of Labor Statistics, three sources told CNN.

The withdrawal comes after CNN’s KFile reported earlier this month that Antoni operated a since-deleted Twitter account that featured sexually degrading attacks on Kamala Harris, derogatory remarks about gay people, conspiracy theories, and crude insults aimed at critics of President Donald Trump.
…
Antoni positioned himself as a watchdog for government accountability in media appearances and Heritage Foundation blog posts. But his own digital trail revealed a pattern of incendiary rhetoric that veered frequently into conspiracy theories and misogyny, KFile reported. (In a statement at the time, the White House defended Antoni and did not address whether he still holds the beliefs he espoused on the account in question.)
…
Trump nominated Antoni in August after firing the previous commissioner, Erika McEntarfer, whom he accused without evidence of rigging jobs data. The ouster came after the July jobs report showed weak growth that month, with significant downward revisions to the May and June reports.

I’d call the Trump administration a clown show, but it’s too vulgar and nasty for that.

Lisa Cook has won a small victory:

The Supreme Court agreed Wednesday to decide whether President Donald Trump can temporarily fire Lisa Cook from the Federal Reserve, setting up a blockbuster showdown over the independence of an agency with vast power over the American economy.

Cook will remain on the job until the court holds oral arguments – set for January – and decides what to do with the president’s appeal. That move came despite Trump’s request for Cook to be removed immediately.

In that sense, the order was a win for Cook – and a rare instance in which the court has decided against quickly jettisoning federal officials Trump has fired.

The high court’s brief and unsigned order came months after a majority of justices appeared to draw a line of protection around the Fed, calling the rate-setting agency a “uniquely structured” entity with a “distinct historical tradition” shielding it from presidential politics – even as the court has permitted Trump to fire leaders at other agencies, like the Federal Trade Commission.

PerpetualDiscounts now yield 5.69%, equivalent to 7.40% interest at the standard conversion factor of 1.3x. Long corporates yielded 4.84% on 2025-10-1, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) remains at the 255bp reported September 24.

The Boston Fed has released a “Current Policy Perspective” titled Who Will Pay for Tariffs? Businesses’ Expectations about Costs and Prices by Philippe Andrade, Alexander M. Dietrich, John Leer, Xiao Lin, Raphael S. Schoenle, Jenny Tang, and Egon Zakrajšek:

Amid evolving global trade policy and rising tariff uncertainty, understanding how small and medium-sized businesses (SMBs) form expectations about future costs and adjust their pricing is critical for assessing how the recently imposed tariffs on US imports could impact consumer prices. To that end, this brief analyzes several waves of a survey of owners and other decision-makers at a nationally representative sample of US SMBs. It focuses on waves conducted during the period of December 2024 to August 2025.

Key Takeaways:

• From December 2024 to April 2025, the share of SMBs expecting larger tariffs increased considerably; expectations about the size of future tariffs also increased over time.
• In the August 2025 survey wave, SMBs whose costs are affected by the new tariffs reported paying an average tariff rate in July 2025 (11.4%) that was nearly double the average rate they paid in January 2025 (6.5%).
• SMBs that believe the new tariffs will persist for a year or longer expect to pass through as much as three times more of their cost increases into consumer prices compared with SMBs that believe the new tariffs will be short-lived.
• A back-of-the-envelope calculation suggests a 0.75 percent near-term increase in core consumer prices stemming from recent tariff increases on directly imported consumer goods.

Good news from America! The American consumer is still spending:

The US economy’s comeback in the second quarter was just revised higher again, and economists estimate that momentum carried on in the third quarter, underscoring the resilience of the world’s largest economy.

Gross domestic product, the broadest measure of economic output, rose at an annualized rate of 3.8% from April through June, the Commerce Department said Thursday in its third and final estimate. That’s significantly higher than the 3.3% rate reported in the second estimate, and well above the 3% initially reported.

GDP was revised higher largely due to new additional data on consumer spending. Personal consumption expenditures rose at an annualized pace of 2.5% in the second quarter, according to the third estimate, up sharply from the second estimate’s 1.6%.
…
The Federal Reserve Bank of Atlanta estimates that GDP continued to power through at a robust pace in the third quarter, forecasting third-quarter GDP to register at a solid 3.3% rate.
…
Against the odds, retail sales, which comprise a sizable chunk of overall spending, rose 0.6% in August from the prior month, according to Commerce Department data, following July’s 0.6% gain.

Canadian GDP was up for different reasons:

Real gross domestic product grew in July for the first time in four months and by slightly more than expected, suggesting the economy will likely avoid a recession this year as U.S. tariffs batter key Canadian sectors.

Statistics Canada reported Friday that the 0.2-per-cent increase in real GDP was largely driven by growth in good-producing industries. The mining, quarrying and oil and gas extraction sector led growth in July, expanding by 1.4 per cent.
…
Motor vehicle parts and motor vehicle manufacturing expanded by 10.5 per cent and 9.1 per cent respectively in July, which coincided with an increase in exports of those goods that month, the Statscan report noted.

However, activity in iron and steel mills and ferro-alloy manufacturing was down by about 25-per-cent since February, before the U.S. imposed a 25-per-cent tariff on steel imports in March.

The industry group in July experienced its steepest decline since April 2020, contracting by 19.1 per cent after U.S. President Donald Trump doubled the tariff rate to 50 per cent in June.

Lisa Cook got some more high-profile support today:

Federal Reserve Governor Lisa Cook has the support of every living former chair of the central bank’s powerful Board in her legal battle with President Donald Trump, who tried to fire her last month based on unproven allegations of mortgage fraud, according to an amicus brief filed to the Supreme Court Thursday.

An appeals court earlier this month kept Cook in her post through a preliminary injunction while her lawsuit challenging Trump’s firing attempt moves forward — just days before the central bank’s September policy meeting. The administration appealed that decision, and is now being considered by the nation’s highest court.

In response to the appeal, Cook on Thursday said firing her would be a “death-knell” for central bank independence, urging the Supreme Court to deny the administration’s emergency request to remove her while the litigation proceeds through the lower courts.

Former Fed chairs Alan Greenspan, Ben Bernanke and Janet Yellen warned against overturning the injunction, stating that it would “threaten” the Fed’s independence of politics and “erode public confidence in the Fed.” The brief was also signed off by some Republicans who once served in high-ranking government roles, such as former Treasury Secretary Henry Paulson and former Council of Economic Advisers Chair Glenn Hubbard.

I have updated the FFN.PR.A and FTN.PR.A posts with the yields as of 2025-9-23.