The Rate Cutting Cycle is Over

Finance-Focused Summary (Macro/Rates, Markets, Investing Outlook)

Overall Thesis on Fed Policy

The presenter argues that the Fed’s rate-cutting cycle is over and that a rate-hiking cycle has already begun (globally, with the possibility that the U.S. could follow soon).

Key macro rationale: Even though the U.S. labor market looks mixed, the Fed may still need to tighten again due to inflation uncertainty and rising bond-market pressure.

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Key Macro / Labor Market Points & Numbers

Non-Farm Payrolls / Job Losses

• Mentions a recent U.S. labor print indicating loss of ~23,000 jobs (month-to-date context implied).
• Year-over-year jobs: +316,000 jobs (about +2% YoY), meaning employment growth remains technically positive.

Unemployment Rate

• Referenced peak around Nov 2025: 4.5%
• Currently referenced around 4.1%, with a slow downward trend.

Labor Force Participation

• Said to be dropping quickly since November, which can keep unemployment from rising even if job demand softens.

Job Openings & Layoffs Signals

• Layoffs: Generally trending up since 2021, but described as still near pre-pandemic levels.
• Job openings: Down since 2022, but described as normalized to pre-pandemic levels.
• Job openings per unemployed worker:
  • Dipped below 1 briefly (fewer openings than workers)
  • Has since returned above 1

Labor-market conclusion: There isn’t a single, clean recessionary labor-market deterioration signal—so the Fed’s reaction function may not be driven purely by payroll weakness.

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Inflation & Rates (Bond-Market Pressure)

Recent Inflation Print

• Headline CPI YoY: described as dropping since a “scary read” in May 2026
• Oil effect: earlier disinflation helped, but oil has ticked back up, increasing the risk of lagged inflation re-acceleration

Bond Yields / “Bond Vigilantes”

• U.S. 30-year yield:
  • Mentioned as hitting about 5.2% in Oct 2023
  • Presenter claims the 30-year yield is still heading higher
• U.S. 10-year yield:
  • Currently referenced around 4.7%
  • Presenter expectation: ~5%
• Core framing: if the Fed doesn’t raise enough, the long end of the yield curve may “scream higher,” implying more inflation worry (versus solely recession worry).

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Fed Policy Timing & Explicit Recommendation

Expected Policy Action

• Base expectation: a token +25 basis point (bps) rate hike

Timing Possibilities

• Previously discussed as possible as early as September
• Now suggests it’s likely in either September or December
  • Mentions possible November, but October seems less likely due to referenced midterms timing (late October)

After the Hike (If/Then)

• After the hike, the presenter’s guess is the Fed will hold around ~4% for a while
• Compared to a 1990s pattern: raise, then hold elevated rates
  • Example cited: held about 5.5% for ~1–1.5 years

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Market Outlook: Correction + Risk Framing

Stock Market Correction Forecast

• Expected correction magnitude: ~10–20%
• Timing:
  • Could start this month
  • Base case is next month
  • Possibly delayed until late next month, making it more apparent around October

Not Necessarily a Recession

• The presenter’s view: rate hikes aren’t automatically catastrophic.
• Argues that hikes can coincide with an economy that’s “still doing okay.”
• Cites a historical analogy (1996/1997) where the market continued higher after a rate hike—implying investors shouldn’t assume stocks must collapse.

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Crypto Tie-In

The presenter suggests the stock volatility/correction phase could help Bitcoin find a market-cycle bottom, framing the correction as a potential turning point rather than only bearish terminal news.

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Global Policy Rate Framing (Macro Dashboard Concept)

A “GDP-weighted policy rate” chart is mentioned, reflecting central bank stances across multiple countries (countries not listed in the provided text).

Interpretation: The GDP-weighted policy rate has been slowly climbing, suggesting multiple central banks are moving back toward tightening.

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Methodology / Framework (Implied)

The approach uses a multi-data-series framework rather than relying on a single indicator:

• Labor market: non-farm payrolls, unemployment rate, labor force participation, layoffs, job openings, job openings per unemployed worker
• Inflation: CPI trend, plus oil price impacts (including lag effects)
• Rates/market pricing: yield levels and direction (notably 30Y and 10Y), and the risk that the long end rises
• Cross-country context: other central banks’ policy-rate direction

Warning (explicit idea): don’t base Fed predictions on a single data series.

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Disclosures / Disclaimers

• No explicit “not financial advice” disclaimer appears in the provided subtitles.
• The presenter repeatedly frames views as analysis/opinion, emphasizing uncertainty and lack of precise timing.

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Tickers / Assets / Instruments Mentioned

• Fed policy rate (policy-rate concept; no ticker)
• U.S. Treasury yields: 10-year and 30-year (no ticker)
• Bitcoin (BTC)
• S&P 500 (referenced via market history / overlay concept; ticker not explicitly stated)

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Presenter / Source

• Benjamin Cowen
  • benjamincow.com
  • Referenced as the author of the report “The Balance of Risks.”