Interest Rates and Stock Prices: An Old Debate Flares up!

    The war in Iran, oil prices and worries about a recession have all taken turns driving stock prices  in 2026 but talk about interest rates and where they are going has been a constant concern all year. In the last few weeks, interest rate worries have come to the surface again, for three reasons, all related. The first is the rise in long-term US treasury rates to levels not seen in twenty years. The second is US debt exceeding $40 trillion for the first time, bringing attention to a long-standing worry that this debt burden may be hitting a tipping point for bond buyers. The third is a that the Federal Reserve has a new chair in Kevin Warsh, and for the many Fed Watchers, who are uncertain about where he plans to lead the Fed, the Federal Open Market Committee (FOMC) meeting coming up in mid-September looms larger than ever. 

    In this post, I hope to step back from the day-to-day coverage of US treasury yields and look at their performance in 2026, not only with a longer term perspective, but also in the context of movements in long terms yields in government bonds in other currencies. I also intend to revisit a discussion that I initiated in 2022, when interest rates were the central act in markets, about the relationship between interest rates and stock prices, and why higher rates do not always translate into lower stock prices, and why that effect will vary across sectors and companies.

Government Borrowing Rates

    Governments borrow money and often do so by issuing bonds in financial markets. The rates on these bonds reflect the concerns that lenders have about the purchasing power of the currencies that they are issued in, and government bond rates, for better or worse, become indicators that drive day-to-day market movements in almost all asset classes. In this section, I will begin with an examination of US treasury rates before expanding the discussion to government bond rates in other currencies.

The 2026 Interest Rate Experience

    Coming into 2026, US treasury rates had mostly moved sideways for a couple of years, but during the course of 2026, rates have risen steadily across the maturity spectrum with long term treasury rates showing more movement than rates at the short end. Both the 20-year and 30-year treasuries rose above 5% during the course of the year, and the 10-year rate, which started the year at 4.18% reached 4.75% at the end of August. The graph below looks at US treasury rates across maturities in 2026:

I know that there are some who attribute almost everything related to interest rates to the Fed, and while I think that is simplistic and wrong-headed to do so, I show the four FOMC meetings that have occurred in 2026, as well as the date of Kevin Warsh’s ascension to the chairmanship of the Fed. While there is little in this graph to indicate that the meetings or the changing of the guard at the top had a material impact on treasury rates, the divergence in rate movement across maturities has removed the kink (at the 2-year maturity) at the start of the year and made the yield curve more upward sloping:

US Treasury Department

A Longer Term Perspective on Interest Rates

    To put the increase in rates, especially long term, during 2026 in context, I looked at movements in 3-month, 10-year and 30-year rates between 1962 and the start of September 2026, with the caveat that the 30-year rate series is available only since the mid-1970s.

Federal Reserve Data (FRED)

As you look at the entire time period, you can see the trauma of the 1970s, a decade where interest rates rose to levels not seen in the US in a century, and peaking in 1981, as the Fed struggled to put the inflation bogeyman back into the closet. While rates did come down from those highs, they stayed in the 8-9% range in the second half of the 1980s, and in the 6-8% range in the 1990s  with the dot-com boom operating as a ballast. In the first decade of this century, ten-year rates declined below 5% in 2002, but stayed in the 4-5% range until 2008, when the financial crises drove rates below 4%. In the last decade (2011-2020), rates trended down, dropping below 3% in 2011 and staying in the 2-3% range for most of the period, with the Fed lending a helping hand. The economic shutdown in 2020, after COVID, pushed long term rates below 1% for the first time in history, and rates stayed low in 2021. The extended stretch of low interest rates from 2009 to 2021 was broken in 2022, when the ten year rate more than doubled, from 1.52% to 3.88%, and rates since have largely stayed in the 4-4.5% range, with the 4.75% rate in September 2026 representing a breakout. The graph also includes the 3-month treasury bill rate, and it moves largely with the 10-year rate, albeit with bigger swings, and rates close to zero for much of the last decade, and the 30-year treasury rate, which has generally traded at slightly above the 10-year rate, with the difference widening in September 2026.

The Drivers of US Interest Rates

    In my prior posts on interest rates, I have argued that the focus among many investors and market-watchers on the Federal Reserve as the all-powerful force moving interest rates has diverted attention from the fundamentals that move rates over time. The first of these fundamentals is inflation, with higher expected inflation manifesting as higher rates, and the second is a real interest rate, which at least in the long term, you can proxy with real growth in the economy. One of the indicators that I track is what term an "intrinsic riskfree rate", which I obtain by summing up the inflation rate and real GDP growth in the US economy each year. Financial markets have minds of their own, and the observed rates are a function of demand and supply:

If your pushback is that actual inflation is a noisy estimate, and that expected inflation is anyone's guess, you are right, but for much of this century, we have had market estimates of expected inflation, that can be obtained from the US treasury market, by comparing the 10-year US treasury yield to the yield on a ten-year US TIPs (inflation-protected rate):

Federal Reserve Data (FRED)

The expected inflation numbers embedded in the US treasury market show a market that is less swayed by year-to-year changes in inflation than more by long term expectations, with a dip in expected inflation between 2008 and 2021, and an increase in expected inflation estimates, starting in 2022.  It is interesting that notwithstanding the surge in oil prices this year, and the increased talk of inflation, there has been only a very mild increase in the long-term expected inflation rate, as calculated using yields on treasuries at the start of September 2026.

    In the graph below, I use the actual inflation rates and real GDP growth rates for the US, going back to 1962, and compute the intrinsic 10-year treasury rate (the cumulative column) and actual 10-year treasury rate each year:

Federal Reserve Data (FRED)

The graph tells the interest rate story well, as the surge in inflation in the 1970s played out as higher rates (intrinsic and real) for much of that decade and the next, and the decline in inflation and anemic real growth translated into the lower rates that we observed from 2009 and 2021. When inflation surged in 2022, interest rates went up, but since the rates that I am tracking are long term rates, the intrinsic risk free rate vastly exceeded the actual rate that year, but the difference has narrowed over time, and almost dissipated by September 2026 (when the US 10-year treasury bond rate was 4.75% and and the intrinsic ten-year rates yielded 5.41%).

Government Bond Rates in Other Currencies (Countries)

   As investors focus on movements in US treasuries, interest rates have been on the move across the globe since 2021. In the graph below, I start with a look at government bond rates in five other currencies: the Euro (with the German 10-year bond rate), the Japanese Yen, the Australian and Canadian dollar and the British pound:

You will notice that the rise in rates from COVID lows (which pushed the Euro ten-year rate into negative territory) has been across the board, with rates surging in 2022. Focusing just on 2026, you see the same pattern, with rates rising across all of the currencies tracked in this graph. What about the currencies of other economies? I track ten-year government rates in four  currencies - the Chinese Yuan, the Indian rupee, the Brazilian Real and the South African Rand - in the graph below:

Here, the results are more nuanced, with no or a muted 2022 effect, and ups and downs since; rates are lower in September 2026 than they were in 2021 in three of the four currencies. 

    The convergence of government bond rates across currencies in the last few years has laid waste to the carry trade, where you borrow money in a low-rate currency and lend it out at a higher-rate currency, and the punishment meted out to its practitioners is, in my view, well deserved. The carry trade is the laziest of investment strategies, with its successes due entirely to lags in how exchange rates respond to fundamentals, and calling it an investment strategy does a disservice to investing, in general.

Interest Rate Ripple Effects

    Changes in government bond rates clearly play out in the pricing of government bonds, and returns you will earn on them, but the ripple effects play out across the rest of the market (financial and real). In this section, I will start with the corporate bond market, where the interest rate effect is dominant, before looking at equities, where interest rate effects are more nuanced. 

Corporate Bonds

    Just as governments need to borrow money to fund their expenditures, businesses also borrow money, either through bank loans or if they are positioned to do so, by issuing bonds. The rates at which businesses can borrow start with a riskfree rate in the currency as a base, with a credit spread reflecting the business borrower's default risk added on. If governments are perceived to be riskfree, the government bond rate stands in as the riskfree rate, but if they are not, the riskfree rate can be extracted from the government bond rate, by netting out the default spread for the government. That makes working with US dollars tricky, since the US lost its Aaa rating (Moody's) in May 2025, and I wrote about the consequences for computing dollar riskfree rates at the time.

   In the graph below, I look at the day-to-day movements in default spreads over the ten-year US treasury rate, across seven bond ratings classes - AAA, AA, A, BBB, BB, B and CCC & lower - in 2026: 

Federal Reserve Data (FRED)

Since default spreads are added to the US treasury rate, and the ten-year rate has risen in 2026 from 4.18% at the start to 4.75% on August 31, 2026, corporate bond rates are all higher than they were at the beginning of the year. For all of the ratings classes, other than high yield (CCC & below), spreads are largely unchanged or lower. The only ratings class where you see a surge in spreads is in the lowest rated bonds, where the default spread has increased by 1.57% during the course of the year.

    The implications for corporate borrowing and costs of capital are direct. Debt is now costlier than it was at the start of the year, for business borrowers across the world, with almost all of the increase coming from rising riskfree rates, in different currencies, with an added cost for the borrowers with the highest default risk. For bond investors, with money in long-term corporate bonds, the year has played out in lower bond prices, in both the treasury and corporate bond markets.

Note that while the returns have been low or even negative, across bond categories, the effect is nowhere near the carnage that we saw in 2022, partly because the rate change has been more muted and partly because the price effect of a rate change is much greater when rates are very low, as they were at the start of 2022.  

Stock Prices

    The essence of intrinsic value is that the value of an asset is the present value of the expected cashflows from that asset. As you take your first steps through discounted cashflow valuation, the question of what should happen to value, as interest rates increase, seems obvious. After all, as interest rates rise, discount rates should go up, and as they go up, the present value should decrease. That is, in fact, the process that I used to estimate the changes in bond value during 2026, in both US treasuries and corporate bonds. The reason that the effect of higher rates on value is direct, with bonds, is because the cash flow on a bond is the coupon and the coupon is set at the time the bond is issued, and does not change as interest rates change. With stocks, the effect of higher interest rates is not as direct for a simple reason. The expected cash flows on stocks are the residual cashflows from operations at businesses, and these residual cash flows reflect the revenues, earnings and reinvestment at these businesses. 

If, as interest rates rise, both cash flows and discount rates change, the effect of interest rates changes on equity prices requires grappling with how these interest rates changes play out in operating metrics:

• With revenues, the key determinants of how higher interest rates play out in value will depend first on why interest rates rose in the first place (higher inflation or higher real rates), and if it is higher inflation, how much pricing power a business has to pass through that inflation to its customers.
• With earnings, the question is how higher interest rates play out in profit margins, through their effects on costs of goods sold (gross), other operating expenses (operating) and interest expenses (net).
• When interest rates rise, and that rise is due more to real rates rising rather than inflation going up, businesses can scale back reinvestment, since fewer investments will generate the returns needed to pass muster. This reduction in reinvestment can increase near-term cashflows, at the expense of future growth.

The effects of higher interest rates will therefore vary across companies, with some companies seeing decreases in value (as the discount rate effect dominates any cash flow effects), some seeing no impact (as the discount rate and cash flow effects cancel out), and some benefiting with higher value, because their cash flows rise more than enough to compensate for higher discount rates:

The effect on equities, in the aggregate, will depend on the composition of the market, and which of the three groups (companies hurt by. not affected by or helped by) dominates. There is the added complication of risk premiums (equity risk premium and bond default spread) being affected by higher rates, adding to the discount rate effect.

As you can see, the question of how higher interest rates will play out in stock prices, will vary across different equity markets, and with any given market, it will vary across time. As US treasuries have risen in 2026, US equity indices have, for the most part, taken that increase in stride, with the S&P 500 and NASDAQ both rising strongly over the first eight months of the year:

To zero in on the interest rate effect, I looked at the yield on the 10-year US treasury bond, by day, during 2026. Of the 169 trading days of the year, from January 1 through August 31, 2026, there have been 84 days when yields increased, 73 days that they decreased and 12 days where they remained unchanged, and I looked at S&P 500 average daily returns for each group:

Were stock prices affected by changes in treasury rates during the trading day in 2026? The answer is yes, but only for larger movements in the yield (>3 basis points), with the S&P 500 down almost half a percent on days when the 10-year rate increased by more than 3 basis points and up about half a percent on days when the rate decreased by more than 3 basis points. Thus, at the risk of sounding contradictory, while stocks have held their own during 2026, in the face of rising rates, they have done much worse on days when the 10-year treasury rate went up than they did on days that rate decreased. The secret to equity resilience in the face of higher oil prices, interest rates and political turmoil has been in equity earnings, which have surged over the course of 2026. In the graph below, you can see the analyst consensus estimates of earnings for the S&P 500 for 2026 and 2027 over the course of 2026: 

Ed Yardeni

Over the first eight months of 2026, analysts who track the S&P 500 companies have raised their estimates for corporate earnings by more than 11% for both 2026 and 2027, indicating that companies are finding ways to get more to the bottom line, in the face of macro concerns and higher rates. I know that you have questions about these earnings, and I do as well, especially in the context of how companies are reporting the effects of AI on their earnings, but at least on the surface, the numbers are impressive. I plan to revisit these earnings numbers in a future post, and take a deeper look at what's driving these numbers, but for the moment, they are the reason that stocks have held their own in 2026.

Equities: Cross Company Comparisons

    While equities, at least in the aggregate, have held their value, how have higher interest rates played out across sectors? In the table below, I break down all US companies, broken down into sectors, and look at the change in aggregate market capitalization for the sector, as well as statistics on individual companies within each sector (lower quartile, median, upper quartile and percent up and down):

Source Data: S&P Capital IQ

During 2026, energy was the best performing sector, not surprising given the spike in oil prices, followed by technology, at least based upon aggregated market cap returns. The divergence between the at measure of return and the returns on the median company in the sector is a measure of how top-heavy a sector's returns are, and with technology, it is clearly the largest tech companies that are driving the returns; the median tech company had returns of only 7.75%, well below the aggregate tech sector returns of 25.22%. The worst performing sectors in 2026, at least through August, are the consumer sectors (discretionary and staple), utilities and communications, with lower pricing power and higher input costs to blame.

   Since the rise in interest rates is not restricted to the United States, I looked at the performance of equities across the globe, based upon aggregated market capitalization (in dollar terms) and looking at individual company metrics on returns:

Source Data: S&P Capital IQ

While global equity value has increased about $17 trillion (11.28%) in 2026 (through August 31, 2026), there are wide differences across regions, with Indian and Chinese equities struggling with low single digit returns, and far more stocks down than up. Some of the performance that you see in this table comes from movements in exchange rates, since regions with currencies that have appreciated (depreciated) against the US dollar will see increases (decreases) in US dollar returns.

Conclusion

    As we get closer to the FOMC meeting date, it is likely that there will more talk about interest rates, and what the Fed can or cannot do to change their course. Much of that debate, in my view, is pointless, since the pathway of rates is and will continue to be set by fundamentals. In fact, the ten-year US treasury rate has been stuck in a fairly tight range, between 4% and 5%, since 2022, and that is largely because expected inflation has settled in at about 2.5%, even as actual inflation has remained volatile. For rates to change significantly, up or down, there has to be a break in inflation expectations, to the up or downside, and there is little that Kevin Warsh or Scott Bessent can do to alter that trajectory. As to how equity markets and businesses are dealing with higher rates, the pain from moving from a low-rate to a high-rate world was most acutely felt in 2022, and both have adapted quickly to the new environment, with businesses finding ways to deliver higher earnings in the face of higher rates, and markets pricing in these earnings to deliver solid returns. 

YouTube Video

Data Links

1. US Treasury Rates, Corporate Bond Spreads and Equities in 2026 (1/1/26-8/31/26)
2. US Treasury Rates: Intrinsic vs Actual 10-year Rates (1954 to 2026)

Information Timing and Release: The Gaming of Guidance!

    I am a lapsed academic, insofar as I have not submitted a paper for publication in more than two decades, but to acquire academic status, I did have to earn a PhD in the distant past. My doctoral dissertation, which like most doctoral theses is little noted and long forgotten, was completed in 1984 and focused on how the frequency of and delays in the release of information plays out in stock price volatility, skew and jumps. I don't plan to rehash that paper, but there have been two long running news stories that reminded me of it. The first is a proposal being floated by the Securities Exchange Commission (SEC) to replace quarterly reporting of financial statements by companies with semi-annual reporting. The second is the opinion voiced by Kevin Warsh, the new Fed Chair, that the Fed should provide less guidance to financial markets on future decisions.

    The two stories may seem unconnected, but they have two common features. First, both actions (removing quarterly reporting requirements and reducing/eliminating Fed guidance), if carried through, will remove "news" that markets have become used to receiving and using to calibrate prices.  Second, the arguments for and against each of these proposals have parallels. The advocates for removing quarterly reports argue that they feed into market myopia and increase short-termism in markets, and the supporters of less Fed guidance believe that this guidance creates gaming among traders and investors, increasing focus on the FOMC actions at the expense of fundamentals. The pushback against both proposals comes from those who believe that withholding quarterly reports and Fed guidance removes information that markets use to set prices, making these prices more volatile and less informative. As is almost always the case with these debates, there is both truth and hyperbole on both sides, and I will try to thread the needle.

Earnings Reports

    Most investors and traders in equity markets, and especially so in the United States, have spent their investing lifetimes in an environment where companies not only release full financial statements every quarter, but do so with fan fare. As we will note in this section, that has not always been the case, even in the US, and has more recent origins, with setbacks, in many foreign markets. 

The History of Earnings Reporting Periodicity

   The Securities Exchange Act of 1934, which created the SEC, set up foundational annual reporting requirements (10-Ks) for publicly traded companies, modified in 1955 to require semi-annual reporting and in 1970, quarterly reports, within 45 days from the end of each quarter. That said, there have been forces that have induced firms to report earnings on a more frequent basis to investors well before these regulatory requirements were put in place. The first were the stock exchanges that imposed their own constraints, with the NYSE requiring most firms to report on a quarterly basis as early as 1939. The second was the recognition by firms that financial transparency (in the form of more frequent and more detailed financial reports) could make them more attractive to investors. As a consequence, it is estimated that in 1931, prior to either the SEC or NYSE mandating disclosure, more than 60% of publicly traded companies were already disclosing information on a quarterly basis.

    The shift to more frequent reporting was slower in the rest of the world and has seen more reversals. Europe, for much of the last century, has a patchwork of rules, with some countries adopting stricter disclosure laws than others. The UK imposed mandatory quarterly earnings reporting in 2007, but allowed a shift back to semi-annual reporting in 2014, and the EU also followed a similar timeline, introducing quarterly reports in 2007 and withdrawing that requirement in 2013. In 2003, Singapore started requiring quarterly reporting for firms with market capitalization exceeding S$20 million, but in 2020, shifted away to requiring it only for a subset of firms with financial and regulatory concerns. Japan started its quarterly reporting requirements in 2003 as well, but it too reversed that requirement in 2024.  In emerging markets, there are large variations across countries. In India, publicly traded companies are required to report their financials on a quarterly basis, and the same is true for many Brazilian and Chinese companies. In Africa, Nigeria requires quarterly reporting but South Africa  has a semi-annual reporting mandate, though many companies voluntarily release quarterly financials; much of the rest of Africa has semi-annual reporting requirements. 

    In sum, the belief at the start of the twenty first century that the rest of the world would follow the US model of mandated quarterly reporting for publicly traded companies has not come to fruition, as many parts of the world have experimented with mandatory quarterly reporting, before abandoning it in favor of semi-annual reporting, for a variety of reasons. That said, it is worth noting that a significant percentage of firms voluntarily report their financial results on a quarterly basis, even when not mandated, albeit with different degrees of depth.

The Content of Earnings Reports

    The debate about how frequently companies should report their financials misses a key detail related to what their financial reports include as content. Focusing on the US, for instance, the magnitude of quarterly earnings reports has increased over time, expanding from bare bones financial statements fin the 1970s to much larger documents that go well beyond financial statements today. In 1980, for instance, a typical quarterly earnings report contained 2000-5000 words, but by the turn of this century, those reports had tripled or quadrupled in size, and the trends continue. The graph below, for instance, looks at the growth in word count for the median quarterly and annual reports in the Russell 3000 companies between 2006 and 2020 (for quarterly) and 1994 to 2020 (for annual):

As you can see the number of words in both quarterly and annual reports has increased over time, and the bulking up of earnings reports can be explained by multiple factors:

1. Accounting rule changes: Accounting rule writers have been busy adding more items to the list of required disclosures for public companies in the last few decades. Some of this increased disclosure (stock-based compensation, for example) reflects a changing business world and is merited, some is in reaction to a corporate scandal and if often knee-jerk and some, in my cynical vie, reflects accounting trying to be relevant to markets again. 
2. Macro events: In years of market crises, economic or political, you will see disclosures increase. In the graphs above, notice the spikes in 2008/2009 and 2020, the first in response to the 2008 banking crisis and the latter to COVID.  Superimposing the effects of globalization, where a company finds itself exposed to problems in every corner of the world, it has added to the disclosure bloat.
3. Legal Protection: One of the culprits responsible for disclosures bulk is the risk exposure section, where companies are required lay out an exhaustive (and exhausting) list of things that can go wrong in their business models. I have never found a risk disclosure useful in a valuation, as it seems to be written by lawyers with the objective of providing legal cover.
4. Guidance: In the 1980s, quarterly earnings reports were focused on reporting on operations during the quarter in question and management was not expected to, and did not provide, guidance about future quarters. That started to change in the 1990s, especially with the passage of the 1995 Safe Harbor Law and Reg FD (which prevented companies from selectively leaking information to analysts), and surged through the second half of the decade, peaking in 2003, when more than 50% of all companies providing earnings guidance. Thankfully, the process has receded, with only a fifth of all firms now providing guidance with earnings reports, but it is undeniable that there is much more forward-looking components to earnings reports than used to be the case.

The bulking up of earnings reports is part of a phenomena that I term "disclosure diarrhea" and argue has undercut the usefulness of these reports, with more disclosure perversely making for less information.

The Earnings Game

    To make sense of the arguments for and against quarterly earnings reporting, you have to get a measure of what happens leading into and out of these reports, in the "earnings game". The process starts with analysts and investors making forecasts of what the earnings report will contain, almost always including estimates of the earnings per share, but often also containing estimates of expected revenues and even operating metrics (like margins) for high profile companies. The analyst forecasts, at least from sell side analysts, become quasi public information and are often aggregated and reported as consensus estimates by financial news services. Zacks, for instance, is one of the services that has been doing this for decades, but that information is now widely accessible on Google and Yahoo! Finance (with the estimates for Apple on July 27, 2026, for the September 2026 earnings report, shown below):

Yahoo! Finance for Apple earnings forecasts

These analyst forecasts, once made, are revisited, partly in response to company-specific news stories and partly to macroeconomic developments, and revised forecasts are provided, with services again tracking these revisions for trends (as you can see below for Apple, from Zack's):

Zack's Apple earnings revisions

As the earnings release date approaches, analysts continue to revise their estimates, and on the date of the announcement, the actual earnings per share is compared to the expected number, with higher (lower) than expected earnings labeled as positive (negative) surprises. The market price response is often consistent, with positive (negative) earnings surprises translating into increases (decreases) in stock price. The graph below, while dated, looks at stock price responses to earnings surprised classified into ten deciles (from most positive to most negative):

There is some evidence that the market responses to earnings reports have become more muted over time, perhaps because of public access to analyst forecasts and revisions. The link between earnings surprises and stock price changes has become the reason why analysts spend as much time as they do, forecasting earnings per share in the next quarterly report, and why traders focusing on the same metric. There is another aspect of the market reaction to earnings surprises that becomes grist for the trading mill, and it comes from the price drifts in the days after earnings are released, with positive (negative) surprises followed by upward (downward) drifts. While the price drift is small, it may still be large enough to make a difference in active trading, where winning by inches is still winning.

    As with almost everything else that is market-related, there are no easy wins in this game, and as more and more people play the earnings forecasting game, new wrinkles have emerged. First, companies have learned to use the flexibility embedded in accounting rules to find ways to beat analyst estimates, with tech companies, in particular, standing out. That earnings gaming plays out as a disproportionately large number of positive earnings surprises (at least among the S&P 500 companies, broken down by sector), as is clear from earnings surprises at the  S&P 500 companies in the second quarter of 2026:

Source: Factset

Second, as companies routinely beat analyst estimates, markets readjust, creating the phenomenon of whispered earnings, where investors build in the expectation that a company that has historically delivered earnings that are 5% or 10% above estimates will continue to do so, and a lesser number is a negative surprise. In the graph below, I look at the market price reaction to earnings surprises in the second quarter of 2026:

Source: Factset

As you can see, the linkage between earnings surprises and price reaction is weak, with a significant subset of positive surprises resulting in price drops. 

The Bottom Line

    Much of the debate about whether the US should shift away from quarterly to semi-annual reports can be boiled down to what you think about the time and energy investors and companies spend playing the earnings game, and where that time and energy will be spent in the absence of quarterly reports. Those who are advocates for less frequent reporting are of the view that the earnings game, focused as it is on next quarter's earnings estimates and whether the company can beat them, contributes to short-termism and distracts from fundamentals. Those who are pushing for preserving the status quo (of quarterly reporting) believe that removing quarterly reports will just shift the game, perhaps more intensively, into the semi-annual reports and that there is value to long term investors from having quarterly reports, gaming notwithstanding. 

    There is another issue that comes up in the context of quarterly reporting, and what would happen if these reports did not exist. Legal strictures notwithstanding, insiders (from within and outside the firm) trade and make money on material information that they have access to, but the public does not. Removing quarterly reporting will create more of an opening for insiders to make money at the expense of public market investors, and while inside trading may contribute to making prices more informative, it also adds to the sense that financial markets are an unfair game.

    I am an investor, and I  think that there is a compromise solution that draws on both sides of this argument. I like quarterly reporting for two reasons. 

1. There is information in those reports that allows me to update my company valuations, though for many companies, the marginal impact of a quarterly report on value is small. 
2. While I have no interest in playing the earnings game, the price corrections that happen around earnings reports serve two purposes. For companies that I have a position in, they can operate as catalysts, bringing down (up) the stock price of over valued (under valued) companies. At the same time, almost all of the information that I find useful in an earnings reports is in the financial statements and footnotes, not in the lengthy discussions of risk exposure or in the management guidance, and I would welcome an elimination of these sections and a slimming down of these reports. 

Note that none of my arguments for preserving quarterly reporting are about short-termism, and that is intentional. First, I am not sure what short-termism even means, since the cynical answer seems to be that any market movement away from your preferred price direction is short term, and any movement in your favor is indicative of market wisdom. Second, I believe that most market participants, and this is true across time and markets, trade to make money in the near term, and that there is nothing that regulators or rule writers can do to alter this dynamic. In fact, the magic of markets is that millions of trades motivated by opportunism and the short term can still yield a price that is long term and rational. Finally, it remains true that if we were all long-term investors who traded only when the fundamentals drove us to do so, markets would be less liquid and transactions costs would increase; short term traders provide a market service and supply liquidity that we all (including long term investors) benefit from.

    I hope that the SEC preserves the current quarterly reporting requirement, while scaling back the volume of disclosure, but if it decides otherwise, it will not materially change much of what I do. I will miss the quarterly updates more with younger, higher-growth firms, where the operating metrics (revenues, margins etc.) can change quickly over short periods, but it is my guess that many of these firms will voluntarily continue the quarterly reporting tradition. 

Fed Guidance on Rates

    For most investors who started investing after 2008, the Fed, in particular, and central banks, in general, have loomed large in the investing process. Many investors attribute the low interest rates after 2008 almost entirely to Fed actions, and by extension, blame the Fed for the higher rates since 2022. I have long argued that not only is this perception incorrect, but that it is unhealthy for investors to view the Fed as either savior or villain. 

A Short (and Personal) History of the Fed

    I started in equity markets in the 1980s, when Paul Volcker as the chair of the Fed played a central role in getting inflation back into check. I might have been ignorant, but I did not know the names of any of the members of the Federal Open Market Committee and had no idea when they met. Changes in the fed funds rate, the only rate effectively controlled by the FOMC, would percolate their way into markets, but I don't remember them being central to equity market movements. 

    Volcker was followed by Alan Greenspan, and while he acquired rockstar status (at least  among investors) in the late 1990s, his views on rates were superseded by his views on equity investors (and their irrational exuberance). The FOMC met eight times per year during that period, and you can access the meeting minutes and actions on the Fed website here, but it stayed away from explicit guidance about future rate changes, choosing to send subtle hints instead. 

    The sea change in Fed behavior and centrality occurred with the 2008 market crisis, when the Fed first introduced explicit guidance noting that rates would stay low "for some time", and it has largely continued that practice through the stewardships of Bernanke (2006-2014), Yellen (2014-2020) and Powell (2020-2026). Along the way, its place in markets has changed, as both bond and equity investors have become focused on the Fed as the arbiter of interest rates and director of the economy. 

The Fed's Powers (and Powerlessness)

    To understand the extent and limits of the Fed's capacity to guide rates and the economy, it is useful to begin with an understanding of what it does. Through its twelve districts that span the United States, the Fed collects information on almost every aspect of the economy, from price pressures building on consumers and producers to the pace of economic growth. While there are other government agencies that also track these statistics, it is undeniable that the Fed has a big picture view and access to more data than any other government agency. The Federal Open Market Committee, composed of all of the members of the board of governors and representatives of the district presidents, sets Fed policy on open market operations (where the Fed buys and sells US government securities), the size of the Fed's balance sheet and the Fed Funds rate (an overnight rate at which banks can borrow and lend their reserves). In addition to the FOMC providing policy direction on inflation and the economy, the Fed chair testifies to Congress every six months, facing and answering questions from legislators.

    As the key interest rate set by the Fed, the Fed Funds rate often acquires an outsized role and there are good reasons to pay attention to it. First, it operates as a signal of what the Fed is seeing in the data it has collected on the economy, with an increase (decrease) in rates indicating that it sees higher (lower) inflation and an overheated (slowing) economy. Second, there are interest rates that are directly tied to the Fed Funds rate, where changes percolate down to businesses and customers; the prime rate and some credit card and CD rates move with the Fed Funds rate. That said, I believe that Fed's capacity to affect interest rates is far more limited than most believe, for two reasons. First, while there is positive correlation between Fed Funds rates and short-term market-set rates (like the US treasury bill rate), there is as much evidence (if not more) that the latter lead the former, rather than the other way around. Put simply, Fed funds rates tend to be increased (cut) after short term treasury rates have gone up (down), suggesting that the Fed is mimicking the market. Second, the relationship between Fed Funds rates and long-term market-set rates, which drive asset valuation and affect borrowers more, is even weaker. To back these contentions, I chart the effective fund funds rate, the three-month US treasury bill rate and the 10-year treasury note rate on a monthly basis from January 1962 to June 2026:

Download data

At the bottom of the graph, I have a table where I look at the data on a quarterly basis, and break it down into three groups - quarters where the fed funds rate decreased, quarters where it increased and quarters where it stayed unchanged. With both fed funds rate increases and decreases, you can see that the link with short term rates is stronger, and with both short term and long term rates, the bulk of the change in rates happens prior to or in the quarter that the Fed Funds rate changed, but there is only a mild spill over into the quarter after, with three month rates, and almost no spillover, with long term rates. Put simply, baed on this history, it looks like changes in fed funds rate are less signals of future movements in interest rates and more reflectors of changes that have already happened.

    The Fed's weaknesses in setting interest rates also plays out in its capacity to alter the trajectory of the real economy. While there are clearly periods that you can point to where Fed actions have had a material impact on he economy, with the Fed Fund rate was hiked to 20% under Paul Volcker in 1981, and triggering a deep recession, being a prime example, the link between Fed Fund rates and economic growth remains tenuous. In the graph below, I look at the changes in Fed Funds rates and real GDP growth in the quarter leading into, the quarter of and the quarter after the change:

Download data (FRED)

Again, there is little backing for conventional wisdom, which is that fed tightening (by raising the Fed funds rate) leads to drops in real growth (or even recessions) and that fed loosening (by lowering the Fed funds rate) is a signal of higher economic growth in the future. In fact, the more general conclusion that one can draw from the data is that the fed effect on the real economy has been more "meh" than "wow".

    The gap between investor perception on what the Fed can control on interest rates and the economy and its actual powers is not just wide, but potentially dangerous. From a policy perspective, it can lead to perverse actions, where central banks are pressured to lower the rates they control (like the Fed Funds rate) in the face of high inflation, leading to even higher inflation in the future. From an investor and business perspective, the focus on what the Fed is doing or will do can take attention away from the fundamentals, especially inflation, that ultimately drive both interest rates and growth.

Download data

As you can see, much of the variation in long term interest rates (with the ten-year US treasury rate standing in as proxy) can be explained by movements in inflation and real economic growth over time, not Fed action or inaction.

The Warsh Doctrine?

    All Fed chairs have had to wrestle with the problem of being perceived as all-powerful, when their true powers are limited, but Kevin Warsh is perhaps more exposed than any of his predecessors. The market fixation with the Fed is now deeply embedded in market, and there are politicians on both sides of the aisle who seem to think that Warsh can bring rates (mortgage, treasury) down to 2% or lower, if he so desires, when the truth is that with inflation expectations running at 2.5-3%, there is no chance of that happening. 

    The pathway out of this problem will be long and there will be pushback, but the end game should be a world where you see and hear from the Fed less, not more. I do believe that the decision to reduce or withhold guidance is a good first step, and it has to be followed by more open humility from the Fed (and from Warsh) about the limits of its powers and honesty about how frequently it follows markets, rather than leads them. In the context of today's (July 29, 2026) decision by the FOMC to leave rates unchanged, for instance, the subtext is that while inflation is running hotter than desired (3% or more, as opposed to the targeted number of 2%), much of that inflation is being driven by a war and its effect on oil prices

    There will be some who feel that markets will be lost without Fed guidance, but I don't think so. After all, financial markets set interest rates and stock prices before the guidance era, and did a pretty good job. In fact, I think that the surge in guidance from the Fed has led many in markets to abdicate their responsibility for paying heed to fundamentals and gauging what interest rates should be. 

Conclusion

    If there is a takeaway from this post, it should be that there is nothing inherently good about having more disclosure. In fact, there is a tipping point, where information overload can cause investors to behave in perverse ways. Thus, I am less of an absolutist about the quarterly versus semi-annual reporting debate than some, though my view is that rather than reduce the frequency of reporting, the SEC should be looking at slimming down reports, by replacing one-size-fits-all disclosure requirements with targeted disclosures and keeping the focus on reporting what has happened rather than prognosticate about the future. 

    With the Federal Reserve too, I think less is more is a better strategy - less guidance from the Fed about what it will do in the future, less opining from FOMC members about interest rates and the economy and less attention to FOMC meetings and the smoke signals that emerge from these meetings. Markets will step in to fill the vacuum, and that is good not just for investors but for the Fed, since its decisions are informed by those market judgments.

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Data

1. Fed Funds Rates and US Treasury rates, by month (1962-2026)
2. Fed Funds Rates and Real GDP growth, by quarter (1962-2026)
3. Intrinsic risk free rates and 10-year Treasuries (1954-2025)

Data Update 4 for 2025: Interest Rates, Inflation and Central Banks!

It was an interesting year for interest rates in the United States, one in which we got more evidence on the limited power that central banks have to alter the trajectory of market interest rates. We started 2024 with the consensus wisdom that rates would drop during the year, driven by expectations of rate cuts from the Fed. The Fed did keep its end of the bargain, cutting the Fed Funds rate three times during the course of 2024, but the bond markets did not stick with the script, and market interest rates rose during the course of the year. In this post, I will begin by looking at movements in treasury rates, across maturities, during 2024, and the resultant shifts in yield curves. I will follow up by examining changes in corporate bond rates, across the default ratings spectrum, trying to get a measure of how the price of risk in bond markets changed during 2024.

Treasury Rates in 2024

    Coming into 2024, interest rates had taken a rollicking ride, surging in 2022, as inflation made its come back, before settling in 2023. At the start of 2024, the ten-year treasury rate stood at 3.88%, unchanged from its level a year prior, but the 3-month treasury bill rate had climbed to 5.40%. In the chart below, we look the movement of treasury rates (across maturities) during the course of 2024:

Download daily data

During the course of 2024, long term treasury rates climbed in the first half of the year, and dropped in the third quarter, before reversing course and increasing in the fourth quarter, with the 10-year rate ending  the year at 4.58%, 0.70% higher than at the start of the year. The 3-month treasury barely budged in the first half of 2024, declined in the third quarter, and diverged from long term rates and continued its decline in the last quarter, to end the year at 4.37%, down 1.03% from the start of the year. I have highlighted the three Fed rate actions, all cuts to the Fed Funds rate, on the chart, and while I will come back to this later in this post, market rates rose after all three.

    The divergence between short term and long term rates played out in the yield curve, which started 2024, with a downward slope, but flattened out over the course of the year:

Download daily data

Writing last year about the yield curve, which was then downward sloping, I argued that notwithstanding prognostications of doom,  it was a poor prediction of recessions. This year, my caution would be to not read too much, at least in terms of forecasted economic growth, into the flattening or even mildly upward sloping yield curve. 

    The increase in long term  treasury rates during the course of the year was bad news for treasury bond investors, and the increase in the 10-year treasury bond rate during the course of the year translated into an annual return of -1.64% for 2024:

With the inflation of 2.75% in 2024 factored in, the real return on the 10-year bond is -4.27%. With the 20-year and 30-year bonds, the losses become larger, as time value works its magic. It is one reason that I argue that any discussion of riskfree rates that does not mention a time horizon is devoid of a key element. Even assuming away default risk, a ten-year treasury is not risk free, with a one time horizon, and a 3-month treasury is definitely not riskfree, if you have a 10-year time horizon.

The Drivers of Interest Rates

    Over the last two decades, for better or worse, we (as investors, consumers and even economics) seem to have come to accept as a truism the notion that central banks set interest rates. Thus, the answer to questions about past interest rate movements (the low rates between 2008 and 2021, the spike in rates in 2022) as well as to where interest rates will go in the future has been to look to central banking smoke signals and guidance. In this section, I will argue that the interest rates ultimately are driven by macro fundamentals, and that the power of central banks comes from preferential access to data about these fundamentals, their capacity to alter those fundamentals (in good and bad ways) and the credibility that they have to stay the course.

Inflation, Real Growth and Intrinsic Riskfree Rates

    It is worth noting at the outset that interest rates on borrowing pre-date central banks (the Fed came into being in 1913, whereas bond markets trace their history back to the 1600s), and that lenders and borrowers set rates based upon fundamentals that relate specifically to what the former need to earn to cover  expected inflation and default risk, while earning a rate of return for deferring current consumption (a real interest rate). If you set the abstractions aside, and remove default risk from consideration (because the borrower is default-free), a riskfree interest rate in nominal terms can be viewed, in its simplified form, as the sum of the expected inflation rate and an expected real interest rate:

Nominal interest rate = Expected inflation + Expected real interest rate

This equation, titled the Fisher Equation, is often part of an introductory economics class, and is often quickly forgotten as you get introduced to more complex (and seemingly powerful) monetary economics lessons. That is a pity, since so much of misunderstanding of interest rates stems from forgetting this equation. I use this equation to derive what I call an "intrinsic riskfree rate", with two simplifying assumptions:

1. Expected inflation: I use the current year's inflation rate as a proxy for expected inflation. Clearly, this is simplistic, since you can have unusual events during a year that cause inflation in that year to spike. (In an alternate calculation, I use an average inflation rate over the last ten years as the expected inflation rate.)
2. Expected real interest rate: In the last two decades, we have been able to observe a real interest rate, at least in the US, using inflation-protected treasury bonds(TIPs). Since I am trying to estimate an intrinsic real interest rate, I use the growth rate in real GDP as my proxy for the real interest rate. That is clearly a stretch when it comes to year-to-year movements, but in the long term, the two should converge.

With those simplistic proxies in place, my intrinsic riskfree rate can be computed as follows:

Intrinsic riskfree rate = Inflation rate in period t + Real GDP growth rate in period t

In the chart below, I compare my estimates of the intrinsic riskfree rate to the observed ten-year treasury bond rate each year:

Download data

While the match is not perfect, the link between the two is undeniable, and the intrinsic riskfree rate calculations yield results that help counter the stories about how it is the Fed that kept rates low between 2008 and 2021, and caused them to spike in 2022. 

• While it is true that the Fed became more active (in terms of bond buying, in their quantitative easing phase) in the bond market in the last decade, the low treasury rates between 2009 and 2020 were driven primarily by low inflation and anemic real growth. Put simply, with or without the Fed, rates would have been low during the period.
• In 2022, the rise in rates was almost entirely driven by rising inflation expectations, with the Fed racing to keep up with that market sentiment. In fact, since 2022, it is the market that seems to be leading the Fed, not the other way around.
  

Entering 2025, the gap between intrinsic and treasury rates has narrowed, as the market consensus settles in on expectations that inflation will stay about the Fed-targeted 2% and that economic activity will be boosted by tax cuts and a business-friendly administration.

The Fed Effect

    I am not suggesting that central banks don't matter or that they do not affect interest rates, because that would be an overreach, but the questions that I would like to address are about how much of an impact central banks have, and through what channels. To the first question of how much of an impact, I started by looking at the one rate that the Fed does control, the Fed Funds rate, an overnight interbank borrowing rate that nevertheless has resonance for the rest of the market. To get a measure of how the Fed Funds rate has evolved over time, take a look at what the rate has done between 1954 and 2024:

As you can see the Fed Funds was effectively zero for a long stretch in the last decade, but has clearly spiked in the last two years. If the Fed sets rates story is right, changes in these rates should cause market set rates to change in the aftermath, and in the graph below, I look at monthly movements in the Fed Funds rate and two treasury rates - the 3-month T.Bill rate and the 10-year T.Bond rate.

The good news for the "Fed did it" story is that the Fed rates and treasury rates clearly move in unison, but all this chart shows is that Fed Funds rate move with treasury rates contemporaneously, with no clear indication of whether market rates lead to Fed Funds rates changing, or vice versa. To look at whether the Fed funds leads the rest of the market, I look at the correlation between changes in the Fed Funds rate and changes in treasury rates in subsequent months. 

As you can see from this table, the effects of changes in the Fed Funds rate on short term treasuries is positive, and statistically significant, but the relationship between the Fed Funds rate and 10-year treasuries is only 0.08, and barely meets the statistical significance test. In summary, if there is a case to be made that Fed actions move rates, it is far stronger at the short end of the treasury spectrum than at the long end, and with substantial noise in predictive effects. Just as an add on, I reversed the process and looked to see if the change in treasury rates is a good predictor of change in the Fed Funds rate and obtained correlations that look very similar. 

In short, the evidence is just as strong for the hypothesis that market interest rates lead the Fed to act, as they are for "Fed as a leader" hypothesis.

    As to why the Fed's actions affect market interest rates, it has less to do with the level of the Fed Funds rate and more to do with the market reads into the Fed's actions. Ultimately, a central bank's effect on market interest rates stems from three factors:

1. Information: It is true that the Fed collects substantial data on consumer and business behavior that it can use to make more reasoned judgments about where inflation and real growth are headed than the rest of the market, and its actions often are viewed as a signal of that information. Thus, an unexpected increase in the Fed Funds rate may signal that the Fed sees higher inflation  than the market perceives at the moment, and a big drop in the Fed Funds rates may indicate that it sees the economy weakening at a time when the market may be unaware.
2. Central bank credibility: Implicit in the signaling argument is the belief that the central bank is serious in its intent to keep inflation in check, and that is has enough independence from the government to be able to act accordingly. A central bank that is viewed as a tool for the government will very quickly lose its capacity to affect interest rates, since the market will tend to assume other motives (than fighting inflation) for rate cuts or raises. In fact, a central bank that lowers rates, in the face of high and rising inflation, because it is the politically expedient thing to do may find that market interest move up in response, rather than down.
3. Interest rate level: If the primary mechanism for central banks signaling intent remains the Fed Funds rate (or its equivalent in other markets), with rate rises indicating that the economy/inflation is overheating and rate cuts suggesting the opposite, there is an inherent problem that central banks face, if interest rates fall towards zero. The signaling becomes one sided i.e., rates can be raised to put the economy in check, but there is not much room to cut rates. This, of course, is exactly what the Japanese central bank has faced for three decades, and European and US banks in the last decade, reducing their signal power.

The most credible central banks in history, from the Bundesbank in Deutsche Mark Germany to the Fed, after the Volcker years, earned their credibility by sticking with their choices, even in the face of economic disruption and political pushback. That said, in both these instances, central bankers chose to stay in the background, and let their actions speak for themselves. Since 2008, central bankers, perhaps egged on by investors and governments, have become more visible, more active and, in my view, more arrogant, and that, in a strange way, has made their actions less consequential. Put simply, the more the investing world revolves around FOMC meetings and the smoke signals that come out of them, the less these meetings matter to markets. 

Forecasting Rates

    I am wary of Fed watchers and interest rate savants, who claim to be able to sense movements in rates before they happen for two reasons. First, their track records are so awful that they make soothsayers and tarot card readers look good. Second, unlike a company's earnings or risk, where you can claim to have a differential advantage in estimating it, it is unclear to me what any expert, no matter how credentialed, can bring to the table that gives them an edge in forecasting interest rates. In my valuations, this skepticism about interest rate forecasting plays out in an assumption where I do not try to second guess the bond market and replace current treasury bond rates with fanciful estimates of normalized or forecasted rates. If you look back at my S&P 500 valuation in my second data post for this year, you will see that I left the treasury bond rate at 4.58% (its level at the start of 2025) unchanged through time.

     If you feel the urge to play interest forecaster, I do think that it is good practice to make sure that your views on the direction of interest rates are are consistent with the views of inflation and growth you are building into your cash flows. If you buy into my thesis that it is changes in expected inflation and real growth that causes rates to change in interest rates, any forecast of interest rates has be backed up by a story about changing inflation or real growth. Thus, if you forecast that the ten-year treasury rate will rise to 6% over the next two years, you have to follow through and explain whether rising inflation or higher real growth (or both) that is triggering this surge, since that diagnosis have different consequences for value. Higher interest rates driven by higher inflation will generally have neutral effects on value, for companies with pricing power, and negative effects for companies that do not. Higher interest rates precipitated by stronger real growth is more likely to be neutral for the market, since higher earnings (from the stronger economy) can offset the higher rates. The most empty forecasts of interest rates are the ones where the forecaster's only reason for predicting higher or lower rates is central banks, and I am afraid that the discussion of interest rates has become vacuous over the last two decades, as the delusion that the Fed sets interest rates becomes deeply engrained.

Corporate Bond Rates in 2024

    The corporate bond market gets less attention that the treasury bond market, partly because rates in that market are very much driven by what happens in the treasury market. Last year, as the treasury bond rate rose from 3.88% to 4.58%, it should come as no surprise that corporate bond rates rose as well, but there is information in the rate differences between the two markets. That rate difference, of course, is the default spread, and it will vary across different corporate bonds, based almost entirely on perceived default risk. 

Default spread = Corporate bond rate - Treasury bond rate on bond of equal maturity

Using bond ratings as measures of default risk, and computing the default spreads for each ratings class, I captured the journey of default spreads during 2024:

During 2024, default spreads decreased over the course of the year, for all ratings classes, albeit more for the lowest rated bonds. Using a different lexicon, the price of risk in the bond market decreased during the course of the year, and if you relate that back to my second data update, where I computed a price of risk for equity markets (the equity risk premium), you can see the parallels. In fact, in the graph below, I compare the price of risk in both the equity and bond markets across time:

In most years, equity risk premiums and bond default spreads move in the same direction, as was the case in 2024. That should come as little surprise, since the forces that cause investors to spike up premiums (fear) or bid them down (hope and greed) cut across both markets. In fact, lookin a the ratio of the equity risk premium to the default spread, you could argue that equity risk premiums are too high, relative to bond default spreads, and that you should see a narrowing of the difference, either with a lower equity premium (higher stock prices) or a higher default spread on bonds.

    The decline of fear in corporate bond markets can be captured on another dimension as well, which is in bond issuances, especially by companies that face high default risk. In the graph below, I look at corporate bond issuance in 2024, broken down into investment grade (BBB or higher) and high yield (less than BBB). 

Note that high yield issuances which spiked in 2020 and 2021, peak greed years, almost disappeared in 2022. They made a mild comeback in 2023 and that recovery continued in 2024. 

    Finally, as companies adjust to a new interest rate environment, where short terms rates are no longer close to zero and long term rates have moved up significantly from the lows they hit before 2022, there are two other big shifts that have occurred, and the table below captures those shifts:

First, you will note that after a long stretch, where the percent of bond that were callable declined, they have spiked again. That should come as no surprise, since the option, for a company, to call back a bond is most valuable, when you believe that there is a healthy chance that rates will go down in the future. When corporates could borrow money at 3%, long term, they clearly attached a lower likelihood to a rate decline, but as rates have risen, companies are rediscovering the value of having a  calculability option. Second, the percent of bond issuances with floating rate debt has also surged over the last three years, again indicating that when rates are low, companies were inclined to lock them in for the long term with fixed rate issuances, but at the higher rates of today,  they are more willing to let those rates float, hoping for lower rates in future years.

In Conclusion

    I spend much of my time in the equity market, valuing companies and assessing risk. I must confess that I find the bond market far less interesting, since so much of the focus is on the downside, and while I am glad that there are other people who care about that, I prefer to operate in a space where there there is more uncertainty. That said, though, I dabble in bond markets because what happens in those markets, unlike what happens in Las Vegas, does not stay in bond markets. The spillover effects into equity markets can be substantial, and in some cases, devastating. In my posts looking back at 2022, I noted how a record bad year for bond markets, as both treasury and corporate bonds took a beating for the ages, very quickly found its ways into stocks, dragging the market down. On that count, bond markets had a quiet year in 2024, but they may be overdue for a clean up.

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Data Updates for 2025

1. Data Update 1 for 2025: The Draw (and Danger) of Data!
2. Data Update 2 for 2025: The Party continued for US Equities
3. Data Update 3 for 2025: The times they are a'changin'!
4. Data Update 4 for 2025: Interest Rates, Inflation and Central Banks!
5. Data Update 5 for 2025: It's a small world, after all!
6. Data Update 6 for 2025: From Macro to Micro - The Hurdle Rate Question!
7. Data Update 7 for 2025: The End Game in Business!
8. Data Update 8 for 2025: Debt, Taxes and Default - An Unholy Trifecta!
9. Data Update 9 for 2025: Dividend Policy - Inertia and Me-tooism Rule!

Data Links

1. Intrinsic risk free rates and Nominal interest rates
2. Bond Default Spreads and Equity Risk Premiums