Education
Plain-English guides to the frameworks behind the analysis.
Every market analysis note in our research thread relies on a framework: OIS, term premium, the dollar smile, COT positioning, the Beveridge curve, the SEP. Here is the reference shelf. Each piece teaches the math, names the gotchas, and points back at the analysis where the framework is being applied today.
- Read →
A plain-English guide to reading NFP week: ADP, Claims, NFP.
NFP week begins Wednesday with ADP employment, continues Thursday with Weekly Initial Claims, closes Friday with NFP. This piece is the framework for reading the sequence: what ADP actually measures (private-sector, 25M workers), where it diverges from NFP (government, small business, seasonal adj), what Claims signals (weekly high-frequency labor read), what NFP's four numbers do (headline, AHE, unemployment, revisions), and how the three prints interact through the week.
- Read →
A plain-English guide to ISM Manufacturing vs Services.
ISM Manufacturing (first business day of month) and ISM Services (third business day) both diffusion indexes; both use 50 as expansion/contraction boundary. Manufacturing is leading indicator; Services is coincident with the cycle. Sub-indexes (New Orders, Employment, Prices Paid, Supplier Deliveries) carry more signal than the headline. When the two diverge (one above 50, one below), the divergence typically persists 2-4 months before re-converging. Framework for the current Manufacturing 49.2 + Services expected 52.0 divergence.
- Read →
A plain-English guide to six-month annualized inflation.
Inflation gets reported YoY; the Fed reads it as six-month annualized. The two can differ materially when inflation is turning. YoY smooths but lags 6-9 months at turning points; six-month annualized captures the current trajectory. July 2026 core PCE at 3.3% YoY but ~2.85% six-month annualized: dovish trajectory below the Fed's 2% target range within striking distance. Formula, calculation, three-month alternative, base-effect and composition-shift caveats. Framework for reading a Fed reaction function focused on trajectory, not headlines.
- Read →
A plain-English guide to reading a suspected FX intervention in real time.
Official confirmation of intervention comes days, weeks, or months after the event. Real-time reading uses five forensic signals: speed and shape (vertical drop plus partial recovery), absence of proximate catalyst, NY Fed rate check reported, cross-asset correlation decoupling (USDJPY down while 10Y up), historical timing pattern (after prolonged weakness, coincident with macro catalyst cover). All five signals passing puts intervention probability above 90%. Thursday's tape passed all five. What intervention buys, what it doesn't, three-phase follow-through pattern.
- Read →
A plain-English guide to reading a contradictory Fed message.
Fed messages become contradictory for four reasons: committee dispersion smoothed over in prepared statement, Chair inexperience with format, genuine policy uncertainty, deliberate optionality. When statement and Q&A conflict, Q&A wins the market's interpretation (unscripted, specific to hypotheticals, hedging patterns readable). Five Q&A dimensions carry highest signal: verb tense, bar-setting language, time-frame specificity, dispersion acknowledgments, referent selection. Warsh's Wednesday: four of five read dovish, explaining the market's dovish interpretation despite hawkish written text. Term-premium credibility discount showed in 30-year yield hitting cycle high.
- Read →
A plain-English guide to JOLTS vs NFP: different labor-market signals.
Both series called labor-market data. NFP is flow (net payroll change) with 2-3 week lag, released first Friday 8:30 AM ET, moves markets 40-100 pips on first minute. JOLTS is stock (unfilled job openings) with 4-6 week lag, released monthly 10:00 AM ET, moves markets 10-25 pips. NFP timely and comprehensive; JOLTS later but structural. When they align, aggregate labor signal is strong. When they conflict, muted reaction because Fed itself needs more data. Tuesday's JOLTS softening softened FedWatch hike probability into Wednesday.
- Read →
A plain-English guide to reading a geopolitical risk-premium unwind.
Geopolitical risk premiums build in discrete steps and unwind in a compressed single-session repricing. The unwind is typically 2-3x more compressed than the build because positioning is all offside simultaneously. This piece is the framework: three-phase structure (initial repricing Day 0, consolidation Days 1-5, resolution Weeks 2-4), three second-order effects (breakeven repricing, central-bank reaction function shifts, cross-asset positioning unwinds), why oil moves outsized in the Day 0 window, what to watch in Phase 2.
- Read →
A plain-English guide to reading FOMC-day tape.
The FOMC statement lands 2:00 PM ET Wednesday; press conference 2:30 PM ET; SEP (quarterly meetings only) at 2:00 PM ET alongside the statement. This piece is the framework for reading FOMC-day tape end to end. What actually lands at 2:00 PM ET (three documents); reading the statement (three signal-carrying change categories); reading the dots (median dot, dispersion, longer-run, growth-unemployment consistency); reading the press conference (opening statement variance, Q&A hedging patterns, committee-dispersion acknowledgment); three-phase tape-timing patterns; the reversal risk over Day 1-5 as post-meeting speeches reveal dispersion. Framework for the July 29-30 meeting.
- Read →
A plain-English guide to gold in a rising real-yield environment.
Gold has one primary rate-sensitive driver: real yields. This piece is the framework for reading gold when real yields decisively rise. Nominal-vs-real decomposition (four sources of nominal yield rise, only some weigh on gold); the Tuesday-through-Thursday tape as a live case study (breakevens rose then stalled, real yields rose only on Day 3); positioning amplification (Thursday's -$86 was 7-9x the mechanical prediction); four-day follow-through pattern; the three complications (central-bank demand, safe-haven flow, positioning extremes).
- Read →
A plain-English guide to reading Treasury auction demand.
Every US Treasury auction has a canonical set of four numbers: high yield vs when-issued, bid-to-cover ratio, indirect bidder share, direct bidder share. Read together they tell you whether the auction cleared with strong demand, weak demand, or somewhere in between. This piece sets out what each number means, how to combine them (strong auction, weak auction, dealer-backstop mixed, foreign-vs-domestic rotation), and the specific FX and rate implications of each configuration.
- Read →
A plain-English guide to pricing a Fed rate-hike tail risk.
CME FedWatch hike probability moved 4→16.6% Tuesday. This piece sets out what the number actually measures (fed-funds-futures implied path, not market opinion), the three channels through which it flows into cross-asset pricing (rates, FX, gold), where the pricing usually comes from (hot data, supply-side inflation shock, Fed speeches, foreign central bank action), and the three possible FOMC-day resolutions (hike happens, dovish hold, hawkish hold). Framework for reading pre-FOMC positioning.
- Read →
A plain-English guide to the Fed communications blackout window.
For the ten days before every FOMC meeting, senior Federal Reserve officials stop speaking publicly about monetary policy. This piece sets out what the blackout is (a self-imposed policy since 2005), why it exists (reduce information asymmetry, focus attention on the statement, reduce internal signaling risk), how markets behave inside it (rates thin, FX headline-driven, data prints outsized), and what typically happens on reopen (post-meeting speeches surface committee dispersion). Framework for reading the current July 18-31 window.
- Read →
A plain-English guide to shipping chokepoints and oil supply risk.
Roughly 60 percent of world oil moves by sea, funneled through five narrow passages. Hormuz (20 mbpd, no full commercial bypass), Bab-el-Mandeb / Red Sea (6-7 mbpd oil plus most Asia-Europe container flow), Suez, Malacca (25 mbpd), Turkish Straits. This piece sets out what each carries, the historical premium a threat produces, the market signals (Brent-WTI spread, options skew, tanker rates), and why the Iran-retaliation story reaches oil specifically through Hormuz and the Red Sea rather than through Iran’s own barrels.
- Read →
A plain-English guide to reading retail sales against a disinflation print.
Retail sales measures consumer demand. When it comes in firm the day after a soft CPI/PPI combination, markets have to reconcile: is inflation falling because demand is cooling, or is it falling despite demand holding up? The two interpretations point to different Fed paths. This piece sets out the four components that matter, the control-group aggregate, and how to read a firm-retail-sales-into-soft-inflation combination.
- Read →
A plain-English guide to reading PPI against CPI.
PPI arrives a day after CPI in most months and delivers the producer-side check on the consumer-price read. When PPI confirms the CPI direction, the disinflation or reinflation signal earns weight. When it contradicts, the market has to figure out which side of the supply chain is doing the moving. This piece sets out the mechanics, the components that matter, and how to read a same-week PPI-CPI combination.
- Read →
A plain-English guide to reading a soft CPI against a hawkish Fed.
A dovish inflation surprise usually gets dovish central-bank language a few weeks later. When the chair delivers hawkish language on the same day as a soft print, markets have to price the conflict. This piece sets out the three specific patterns that emerge, how each resolves historically, and what to watch for in the days following. Warsh’s Tuesday testimony against the soft June CPI is the current example.
- Read →
A plain-English guide to how oil shocks transmit to inflation and rates.
Brent surged 9% Monday on renewed US-Iran conflict over the Strait of Hormuz. Oil shocks translate to headline inflation within weeks, core inflation within months, and rate expectations within days. This piece sets out the four transmission channels, the specific lags each carries, and how markets typically price the transmission before the data confirms it.
- Read →
A plain-English guide to reading Fed Chair congressional testimony.
Tuesday brings Chair Warsh’s first congressional testimony, before the House Financial Services Committee. Testimonies are the most-watched Fed communication event outside the FOMC decision itself. This piece sets out the four sections that carry policy signal, the specific question types to watch for, and how testimony language compares to statement and minutes language across the last three chairs.
- Read →
A plain-English guide to reading a split Fed committee.
The June 2026 FOMC came out 9-8-1 on the projected direction of rates by year-end. That is the most divided committee since the taper-tantrum era. This piece sets out how to read a split committee: which votes matter, how splits resolve, the historical base rates on convergence direction, and why the median dot can be a poor summary when the underlying distribution is bimodal.
- Read →
A plain-English guide to reading FOMC minutes.
The Federal Reserve publishes minutes of its policy meetings three weeks after each decision. The minutes are the most detailed record we get of how the committee thinks — but they require careful reading. This piece sets out the six sections that matter, the language patterns that reveal dissent, and the specific words that shift market pricing when they appear or vanish.
- Read →
A plain-English guide to retrace patterns: cascade, intervention, and regime shift.
Large single-session FX moves retrace in three characteristic shapes. Cascades retrace fast and partial (30-50% within 2-3 sessions). Interventions retrace slow and shallow (20-40% over weeks). Regime shifts barely retrace at all. Reading which shape the retrace takes identifies which driver was in charge of the original move — a diagnosis the tape itself provides.
- Read →
A plain-English guide to positioning-liquidation events.
A move too big and too fast to be explained by the macro tape is a positioning event, not a fundamental one. This piece explains the mechanics: what a liquidation cascade looks like from the option-flow and stop-cluster side, how to identify one in real time, and why the direction of the eventual retrace is not the same as the direction of the initial move.
- Read →
A plain-English guide to the Bank of Japan policy toolkit.
The BoJ policy rate is the headline; it is not the tool. This piece sets out the five instruments the desk actually deploys: the QQE framework, YCC, the Rinban schedule, the JGB purchase cap, and unsterilised FX intervention conducted for the MoF. The seven pressure points in that stack, and what each signals when the Bank moves them.
- Read →
A plain-English guide to yield differentials and FX carry.
The two-year cash-rate gap is the single cleanest driver of every G10 cross. This piece explains why the swap-implied differential (not the spot-rate gap) is what matters, how carry decomposes into hedged and unhedged components, and why the 2026 yen carry has been the trade of the year.
- Read →
A plain-English guide to gold as a macro signal.
What gold actually prices: the real-yield identity, the dollar inverse, the central-bank bid, and the risk-off impulse. When these drivers agree the gold print is informative; when they disagree the disagreement is the signal. The framework that turns a single price into a regime read.
- Read →
A plain-English guide to the Taylor rule.
The published policy rule that benchmarks the federal funds rate against inflation and the output gap, the four parameter choices that matter, what the rule recommends today against the 3.4% core PCE print, and why Warsh has hinted the next framework may make explicit reference to it.
- Read →
A plain-English guide to nowcasting.
How the Cleveland Fed inflation nowcast and the Atlanta Fed GDPNow models work, what daily inputs feed them, why they tend to beat consensus forecasts by 30-40bp on release day, and how to read them against the upcoming print.
- Read →
A plain-English guide to the oil market.
Brent vs WTI, the curve structure (contango vs backwardation), what OPEC+ actually controls and what it doesn’t, the geopolitical-premium overlay, and why a $73 print after a $93 peak is the cleanest single read of the Iran de-escalation flow.
- Read →
A plain-English guide to central bank FX reserves.
What "war chest" means in practice: the $1.3 trillion Japan holds, how it is composed, what fraction is actually deployable for intervention, and the constraints that make the headline number misleading.
- Read →
A plain-English guide to real yields.
How a real yield is defined (nominal minus breakeven), the difference between TIPS-derived and survey-derived measures, why real yields drive FX more than nominal yields, and where the current US 10-year real yield at roughly 2.0% places the dollar regime.
- Read →
A plain-English guide to the carry trade.
How a carry trade is constructed, the math behind the yield differential and the FX-volatility cost, why USD/JPY is the canonical example, and the historical pattern of why carry trades end (rate convergence, vol spike, or intervention).
- Read →
A plain-English guide to monetary policy frameworks.
What a "framework" actually is, the 2020 FAIT regime and why it lasted only five years, the alternatives (Taylor rule, price-level targeting, NGDP targeting), and what Warsh’s "not well suited" comment yesterday tells us about where the framework review is headed.
- Read →
A plain-English guide to financial conditions indices.
How the Goldman, Chicago Fed, and Bloomberg FCIs are built, why the Fed treats them as the policy-transmission channel, and what a 50-basis-point move in the index actually does to real-economy outcomes.
- Read →
A plain-English guide to forward guidance.
How the Fed communicates intent through statement language, the SEP, and the press conference, the four eras of guidance (qualitative, calendar, threshold, state-contingent), and the language hooks markets actually trade.
- Read →
A plain-English guide to r-star, the neutral rate.
What r-star actually is, the three models (Laubach-Williams, Holston-Laubach-Williams, Lubik-Matthes) that estimate it, why the longer-run dot is essentially r-star plus 2 percent, and why Warsh’s drift on this number is the most durable signal in the SEP.
- Read →
A plain-English guide to inflation expectations surveys.
The four surveys central banks watch — Michigan, NY Fed SCE, the Conference Board, and the SPF — what each one asks, why the Fed weights them differently, and the "anchored vs unmoored" framing that today’s Michigan long-run jump just put on the table.
- Read →
A plain-English guide to CPI components and the supercore.
The four categories that make up the CPI basket, the OER trick that makes shelter dominate the index, why the "supercore" (services ex-housing) is the cleanest demand read, and the math behind the sub-component weights.
- Read →
A plain-English guide to inflation breakevens.
How TIPS-vs-nominal gives you a market-implied inflation expectation in one number, why the 5y5y forward is the cleanest read of long-run anchoring, and the construction math behind both, written for the CPI Wednesday and the SEP in two weeks.
- Read →
A plain-English guide to the SEP and the dot plot.
What the Summary of Economic Projections actually is, how the dot plot is assembled, the difference between the median dot and the consensus call, and why Warsh’s first SEP at the 16-17 June meeting is the most-watched piece of paper of the year.
- Read →
A plain-English guide to the NFP report.
Two surveys, one release: the establishment survey that counts jobs, the household survey that counts people, the birth-death model that adjusts for new firms, and the benchmark revisions that quietly rewrite the picture once a year.
- Read →
A plain-English guide to FX intervention.
When Japan’s MoF actually steps in, the difference between verbal and actual intervention, the 2022 and 2024 precedents, and what to watch in the price action around USD/JPY 160.
- Read →
A plain-English guide to ADP vs nonfarm payrolls.
Two payroll measures, three structural differences, and the rule of thumb that lets you translate an ADP surprise into an expected NFP reaction. The math behind why they diverge by 100k or more in a single month.
- Read →
A plain-English guide to the Beveridge curve.
The vacancy-unemployment relationship that sits behind every JOLTS release, the post-pandemic outward shift and what is reversing it, and the u* = √(uv) shorthand for reading the curve in one line.
- Read →
A plain-English guide to economic surprise indices.
How the Citigroup CESI is built, why FX desks watch it more than the prints themselves, and the math behind translating an upside ISM into the index move it produces.
- Read →
A plain-English guide to PCE vs CPI.
Why the Fed reads PCE instead of CPI, what the trimmed-mean variant adds (and why the new Chair prefers it), and how to translate a print in one measure into the other.
- Read →
A plain-English guide to the dollar smile.
Stephen Jen’s three-regime framework for the dollar, the math behind the smile shape, and where DXY actually sits today between left-side risk-off, middle-trough underperformance, and right-side US exceptionalism.
- Read →
A plain-English guide to the term premium.
Decomposing a 10-year Treasury yield into the expected path of policy and the term premium, the math from the ACM model, and why the bucket has gone from deeply negative to firmly positive in this cycle.
- Read →
A plain-English guide to COT positioning, with corn as the case.
How the CFTC Commitments of Traders report is built, the math that turns a raw net-long number into a percentile, and what May’s corn print is saying about a crowded long.
- Read →
A plain-English guide to currency correlations.
What the correlation between two markets measures, how to compute it in five lines of arithmetic, and the one cell of today’s dollar matrix that’s gone the wrong way.
- Read →
A plain-English guide to OIS.
What overnight-index swaps measure, what they do not, and how to read them against fed-funds futures.
Reference pieces are evergreen. They update when a framework meaningfully changes, not on a calendar. The Atom feed covers both analysis and reference releases.