Caffeine, Comets, and Central Bank Confusion

David Halseth
Nov 2
2 min read

For the week ended 11/1/2025.

Okay, what do we have on this first week of November? Not much in the way of government-supplied data – something to do with a shutdown? No GDP estimate last week, but we did get another 25-bps rate cut from the FOMC (more on that in a moment). And consumers remain somewhat confident, if not increasingly picky.

Meanwhile, from a sketchy corner of the internet, I learned that NASA is tracking a possibly intelligent comet (3I/ATLAS), water buffaloes in Thailand are competing in beauty contests, and the CU football team in Boulder has officially fallen apart. Sorry, lack of caffeine had me tumbling down that black hole. Let’s get back on track.

As mentioned, the Fed lowered rates for the second consecutive meeting, bringing the range to 3.75% – 4.00%. Markets cheered – briefly – with the 2-year Treasury posting its largest one-day rally in months. But not everyone at the Eccles Building is clapping along. A growing chorus of dissenting officials is questioning whether these cuts are even warranted.

Can’t say I blame them. The broadest measure of inflation has climbed steadily since April’s low of 2.3% to roughly 3.0% today. Since the Fed’s “target” is 2.0%, that means inflation is running about 50% hotter than they’d like. Maybe the grumbling isn’t misplaced… or maybe it’s election-season economics at work. Call me skeptical, but the timing feels a touch too convenient.

On Wall Street, domestic stocks rose another 70 bps last week and are now up 17.5% YTD – fueled, as always, by AI mania (both real and imagined). The Magnificent 7 and their loyal hangers-on continue to defy gravity, logic, and the English language with every new “trillion-dollar” headline. Bonds, however, took another beating, down 60 bps, as investors grow wary of trillion-dollar deficits and sticky inflation. Traditional public fixed income? Still looks like a long-term losing bet to me.

Looking ahead, the data drought continues, with private providers like ADP and S&P filling in the gaps this week on manufacturing and services.

Until then, steer clear of intelligent comets and Buffaloes – whether in Thailand or Boulder. Neither seems good for your sanity.

Good morning.