Weekly Economic Report 6.5.26

The monthly BLS employment report carries disproportionate weight in the market’s evaluation of the economy, as was apparent in the sharp selloff in the NASDAQ in reaction to strong job growth -- which investors collectively see as encouraging tighter monetary policy. So tight that the market priced in one whole 25 percent increase in overnight rates by the end of 2026. If your business is that sensitive to rates, you are grossly overleveraged. Clearly, the sell off tells us more about the market’s confidence in ongoing momentum than about the impact of a modest rate change.

EU06-05-2026.pdf

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