I think what's most annoying about this market environment is the narrative switching. After today's weaker than expected jobs report, expectations for an October rate hike fell sharply, with markets now favoring a Fed hold. But just days ago, the dominant narrative was economic resilience, a big upward GDP revision, and consumer spending that seemed almost immune to inflation. This back and forth is exhausting. And not all that valuable. Chair Warsh has pushed back on the data point dependency. This tendency to let the latest release drive the decision.

He emphasizes trends instead. So, in that spirit, here are three trends that I see today. Number 1. Inflation is a real problem, but potentially not a solvable one.

At least not by monetary policy. Higher rates can limit second round effects from energy. But they won't produce more oil. They won't unwind tariffs, or necessarily derail AI capital expenditures.

Number 2. The labor market isn't collapsing. But hiring is a pain point. And that's where I'd watch AI.

Its biggest labor market effect may not be mass layoffs, but growing unevenness. Strong hiring in some areas, and very little in others. And here's the last one. Treasury yields may be settling into a structurally higher range reflecting AI-driven investment, and growth, fiscal concerns, and a less reliable buyer base.

So here's my unheroic rate forecast. Rarely is the fed one and done. But I doubt we're looking at an extended hiking campaign. My guess is three hikes over the next six months.

Investors may get a reprieve from a very aggressive hiking fed. But that doesn't necessarily spare them higher yields. Those are already here.