Macro Update

The 2-year real interest rate has now climbed to its highest level since the Trump administration took office.

At the same time, we are living through the deepest and longest drawdown in the history of the Bloomberg US Aggregate Bond Index.

We are moving in the wrong direction and I doubt Scott Bessent is thrilled about either development.

This is the exact opposite of inflating your way out of a debt problem.

Yet investors are increasingly pricing in the possibility of another rate hike.

I suspect policymakers will be forced to address that reality.

When they do, the implications for hard assets could be substantial.

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Let me expand on that, along with some thoughts on Friday’s market action and my latest views on precious metals.