Do The Hard Thing
I set three goals for the last 90-day challenge: be more fit (burn more calories than I consume), launch a new brand, and double our production. I tied daily actions to my goals. I work to be physically active every day, I log my activities and food consumption daily, and I carve out 3 hours a day to focus on brand development and business development.
Like with any direct focus, these habits have been working—I've seen big progress. But with the year winding down, and after getting sick, I can feel the familiar pull of fatigue, especially when it comes to the health aspect. I did not want to run today. Running is hard. I almost skipped it. It’s easy to for me to let the intensity slip in this area, and to settle back into old patterns especially as we head towards the holidays.
I came across this quote this week “Improvements are only temporary until they become part of who you are.”- James Clear. This reminded me of the work I still have left to do. I need push past the suck, focus on the daily discipline so I can shift my personal identity and become the kind of person that naturally does these behaviors.
I AM A RUNNER ;)
How are you doing with your goals in these last 45 days? Are you slowing down or are you running through the tape faster than you started the race?
DO THE HARD THING! Put in the work, finish strong, become the kind of person for whom these results are inevitable.
*see hard thing video below
Notes that Resonated
You often fall to fear when you are the closest to the win
Everything you go through has a purpose
The climb is a necessity, not an option: If you got dropped at the top of the mountain, you'd pass out from the altitude.
The journey prepares you for the success
It’s not about showing people your superpowers it’s about showing others theirs
Surround yourself with people who push you to be better
Purpose, people, product (in that order)
You can’t be grateful and hateful at the same time
Gratitude eliminates anxiety!
There is power in your tongue. Stop talking about being tired, broke, angry, and out of shape.
Actions become habits when you do them daily
Market Update
Are We Headed Toward 8% Interest Rates?
The financial markets are grappling with a whirlwind of indicators suggesting trouble ahead, even as the Fed attempts to guide the economy to a soft landing. Powell Confirmed last week they are in “no hurry to cut rates”. This seems contrary to their recent behavior but in line with recent data releases. His comments give us insight to what he will do in December. Powell “reaffirmed the Fed's commitment to reaching its 2% goal, acknowledging that the path may be uneven”.
Inflation Creeps Back
Core CPI inflation has risen for the first time in 18 months, and Core PPI inflation has increased for two consecutive months, with last month’s numbers revised higher.
September’s CPI report showed inflation at 2.4%, slightly above expectations, while Core CPI rose to 3.3%, marking its first increase since March 2023. This resurgence in inflation casts doubt on the Fed’s decision to cut rates aggressively.
Fed Chair Powell has hinted at a pause in rate cuts this December, likely to help stabilize yields and allow more time to assess the incoming data.
The Fed’s Credibility Under Scrutiny
The Fed’s messaging has been inconsistent, with statements shifting from "inflation is transitory" in 2021 to a seemingly rushed 50 basis point rate cut in September 2024. Now, Powell says there’s no hurry to cut rates further.
Investors are increasingly questioning whether the Fed acted too quickly with its recent rate cuts. Rising inflation paired with an uptick in unemployment—258,000 new claims this week, well above expectations—suggests a stagflation scenario could be unfolding.
Bond traders are investing against Fed direction. Tanking bond prices even though the Fed funds rate has been cut.
Is the Fed losing control?
Mortgage Rates, Rising Yields, and Rate Cuts
For the first time since Q4 2022, the 30-year Treasury yield has surpassed the Fed Funds rate, despite two rate cuts by the Fed this year, reducing rates from 5.50% to 4.75%.
The 30-year yield has jumped over 60 basis points in the past two months, reflecting investor skepticism about the Fed’s ability to maintain control over inflation.
Historically, when the yield curve turns positive, a recession typically follows. Yet, if the Fed can engineer a soft landing, this could be the first time the indicator proves incorrect. Will history repeat itself, or will the Fed achieve the elusive soft landing?
Although the Fed does not control long term rate cost their policy often influences investor behavior. The concern with the 10yr pricing over the Fed Funds rate is the idea that the Fed is losing control. If that scenario plays out economists believe the 10yr and 30-year yields would spike over 5.5 and 6% respectively. Driving mortgage rates towards 8%.
As yields continue to rise, mortgage rates have followed suit, with the average 30-year fixed rate climbing back above 7% last week
Mortgage-backed securities tested key support levels Friday. If they fail to hold this week, we could see a significant move lower in bond value, pushing mortgage rates 50bps or higher.
Divergence Between Stocks and Bonds
For the first time in 22 years, the 10-year Treasury yield has exceeded the S&P 500’s earnings yield, suggesting that the stock market could be overvalued. This inversion has historically preceded market corrections, raising questions about the sustainability of current equity valuations.
Notably, Warren Buffett seems to be betting on the come. He now holds more Treasuries than the Fed itself, signaling his bet on bonds being undervalued unlike many major stocks. This is a ray of hope that the bond market will calm down next year driving down mortgage rates to a more neutral level.
In summary, the Fed is caught in a precarious position: managing inflation that refuses to stay down, while navigating rising unemployment and a jittery bond market. With the December pause now on the table, the next few weeks of data could determine whether the Fed’s pivot was premature, and whether markets have already priced in a policy mistake. Expect a continued bumpy ride into the year-end.
Key Events to Watch This Week:
October Housing Starts Data (Tuesday)
Nvidia Earnings Report (Wednesday)
Philly Fed Manufacturing Index (Thursday)
October Existing Home Sales Data (Thursday)
S&P Global US Manufacturing PMI (Friday)
Michigan Consumer Sentiment Report (Friday)
Nvidia’s earnings could be pivotal for the ongoing market movement, while several Fed speakers events this week may provide more clarity on the central bank’s next moves. Their tone will likely drive the bonds in a pivotal direction.
Videos to watch
Do hard things!!!
If you don’t want to watch the whole thing…watch the beginning and then skip to the 9min mark. That is where it gets interesting.
If you want to know why this is a hard thing… watch this. Very inspiring.
Top Quotes
“Who’s got it better than us?” - Jim Harbaugh (the essence of gratitude)
Fear has two meanings: ‘Forget everything and Run’ or ‘Face everything and Rise’ - Zig Ziglar
Food & Drink
Brookies: sweet potato oatmeal brownie
