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Hassett Fed Talk Adds Fuel to Dovish Market Expectations

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Sevens Report says stocks are rising on Fed-cut hopes — but warns bond markets see real risks.

Why Kevin Hassett as Fed Chair isn’t automatically bullish

Stocks have extended a two-week rally as expectations for a December Fed rate cut have surged from under 50% to nearly 100%. According to the Sevens Report, that shift began with dovish commentary from New York Fed President John Williams and a run of softer labor and inflation data.

But the firm highlighted a second catalyst behind the market’s bullish rate bets: President Trump’s near-confirmation that he intends to nominate Kevin Hassett as the next Federal Reserve chair. Among the finalists, Hassett is viewed as the most dovish, leading investors to anticipate a more accommodative policy stance once he takes over in mid-2026.

Still, Sevens cautioned that a highly dovish chair is not an automatic positive. While stocks cheered the development, bond markets reacted in the opposite direction. The 10-year yield rose 10 basis points last week, reflecting concerns that an overly soft approach could revive inflation — echoing the stop-and-go policy mistakes of the 1970s under Arthur Burns.

Sevens emphasized that Hassett has not shown any inclination to jeopardize Fed independence, but warned that even the perception of political pressure could push Treasury markets lower and yields higher. The firm noted that maintaining the Fed’s independence is “far more important for supporting equities” than whether end-2026 policy rates land at 3.625% or 2.875%.

Also, click here to view the full article published in Investing.com on December 5th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

What Caused the Government Shutdown (And Why That’s Important to Markets)

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What’s in Today’s Report:

  • What Caused the Government Shutdown (And Why That’s Important to Markets)

Futures are slightly lower despite strong CSCO earnings and the government officially reopening.

CSCO posted solid results and the stock is up 6% pre-market but the recent AI skepticism remains in place and the earnings aren’t keying a broader rally.

Politically, the government shutdown officially ended, removing what was an increasing economic headwind.

There are no economic reports today (now that the government is reopened, we will await a new schedule of backlogged releases) but there are several Fed speakers:  Daly (8:00 a.m. ET), Kashkari (10:30 a.m. ET), Musalem (12:15 p.m. ET) and Hammack (12:20 p.m. ET).  If their commentary further pushes back on expectations for a December rate cut, that will pressure stocks.

 

Bullish Argument

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What’s in Today’s Report:

  • Did the Fed Just Weaken the Bullish Argument?

Futures are slightly lower following a busy night of news, as major tech earnings were mixed while the Trump/Xi summit met widely held expectations.

On earnings, META, MSFT and GOOGL posted mixed results.  GOOGL beat earnings and the stock is up 8% pre-market while META and MSFT slightly underwhelmed.

Geopolitically, the Trump/Xi summit resulted in expected tariff reduction, soybean purchases and rare earth exports but didn’t contain any surprisingly positive breakthroughs.

Today focus will be on earnings with the last of the major tech firms reporting, including AAPL ($1.73), AMZN ($1.58) and, on the consumer spending front, MA ($4.31).

 

Fed Day

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What’s in Today’s Report:

  • Abbreviated FOMC Preview
  • Housing Data Takeaways

Futures are trading at all-time highs ahead of the Fed decision and multiple Mag-7 earnings releases due out after the close as President Trump made optimistic remarks about his three-hour meeting with President Xi tomorrow.

Economically, Australian CPI jumped to 3.2% vs. (E) 3.0%, up 1.1% from Q2’s reading of 2.1%.

Today, there are a few “second-tiered” economic reports due to be released including International Trade in Goods (E: $-90.0B), Wholesale inventories (E: -0.2%), and Pending Home Sales (E: 1.0%) but their market impact should be limited given the looming Fed decision.

It’s Fed Day with the FOMC Meeting Announcement due to hit the wires at 2:00 p.m. ET followed by Fed Chair Powell’s Press Conference at 2:30 p.m. ET.

Aside from the Fed decision, which could have a material impact on markets today despite the looming Trump-Xi meeting tomorrow, we are getting into peak earnings season with quarterly results due from major U.S. companies including VZ ($1.19), BA (-$2.46), CVS ($1.36), CAT ($4.52), META ($6.61), MSFT ($3.65), GOOGL ($2.26), and CMG ($0.28).

 

Is AI the Only Thing Supporting This Market?

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What’s in Today’s Report:

  • Last Week’s Takeaway: AI Enthusiasm Could Soon Be the Only Thing Holding Up This Market
  • Weekly Economic Cheat Sheet – Fed Surveys in Focus

Stock futures are solidly higher this morning, recovering a good portion of Friday’s losses amid easing trade war fears.

President Trump dialed back Friday’s tariff threats on China with a post on Truth Social saying “Don’t worry about China, it will all be fine,” which is fueling a relief rally today.

Economically, Chinese trade data was strong with exports jumping from 4.4% to 8.3% vs. (E) 6.5% in September.

There are no economic reports in the U.S. today and just one Fed speaker: Paulson (12:55 p.m. ET).

There is one noteworthy “bellwether” earnings release today: FAST ($0.30), however, with bond markets closed in observation of Columbus Day, it is likely to be a quiet day of volatility consolidation.

FOMC Preview

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What’s in Today’s Report:

  • FOMC Preview
  • Chart – The Threshold for “Fed Disappointment” is 75 bp by Yearend
  • Empire State Manufacturing Survey Takeaways

Futures are modestly higher this morning thanks to bullish momentum as traders look ahead to the Fed decision.

Economically, Eurozone Industrial Production rose 0.3% vs. (E) 0.5% while the German ZEW Survey’s Current Conditions headline fell to -76.4 vs. (E) -74, however, neither report is materially impacting markets this morning with the Fed decision looming large.

Today, there are multiple important economic reports due to be released including Retail Sales (E: 0.3%), Import & Export Prices (E: -0.2%, -0.2%), Industrial Production (E: 0.0%), Business Inventories (E: 0.2%), and the Housing Market Index (E: 33).

Additionally, there is one noteworthy earnings release to watch: FERG ($3.01), but with the September FOMC meeting getting underway it is likely that a sense of “Fed paralysis” begins to grip markets as traders position into the decision.

 

Sevens Report: 10-Year Yield Drop Below 4% Could Break ‘Bad News Is Good’ Trade

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Tom Essaye warns a fast move lower would signal economic anxiety, not relief

A sudden move below 4% on 10-year Treasury note yield could kill the ‘bad news is good’ market vibe

Lower yields can be a positive for stocks, foremost by making equities more attractive in comparison. But context matters, and a sudden drop could serve to unnerve investors who have largely continued to view negative economic news as a positive because it reinforces expectations for the Federal Reserve to resume cutting interest rates later this month, said Tom Essaye, founder of Sevens Report Research, in a note.

“The 4.00% level on the 10-year yield is important and if we move quickly through that level, it will signal more economic anxiety and that will further undercut the ‘bad-is-good’ narrative around weak data and Fed rate cuts (point being, if the 10-year yield falls quickly through 4.00% and heads lower, bad data will be bad for stocks because it’ll signal rising chances of an economic slowdown),” he wrote.

Also, click here to view the full article published in MarketWatch on September 9th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

September Bitcoin Update and Outlook

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What’s in Today’s Report:

  • September Bitcoin Update and Outlook
  • What Yesterday’s CPI Means for Markets

Futures are slightly lower on mixed data and earnings overnight.

ADBE was the latest tech company to post earnings and the results were solid (beat on EPS and revenue and a guidance increase) but concerns about AI sapping demand for software kept gains modest (ADBE is up 3% pre-market).

Economically, data was mixed.  UK Industrial Production badly missed estimates (-1.3% vs. (E) 0.5%) while German CPI and UK Monthly GDP both met expectations.

Today the only notable economic report is University of Michigan Consumer Sentiment (E: 58.0) and focus will be on the inflation expectations.  As long as they don’t move sharply higher, it’ll cap a generally positive week for markets on the inflation front (which has been the main reason stocks are higher this week).

 

Jobs Day

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What’s in Today’s Report:

  • Abbreviated Jobs Report Preview

Futures are modestly higher ahead of the jobs report and following solid tech earnings overnight.

Semiconductor company Broadcom (AVGO) beat estimates and offered bullish guidance and the stock is up 9% pre-market and that’s helping to lift futures.

Economically, German Manufacturers’ Orders missed estimates, felling –2.9% vs. (E) 0.5%.

Focus today will be on the jobs report and expectations are as follows:  E: 77K Job-Adds, 4.3% Unemployment Rate, 3.8% Wage Growth.  Any job adds number in the mid to low 100k range would be ideal for stocks as it would keep rate cut expectations high but also signal a stable labor market.  Conversely, if job adds drop close to zero (or even go negative even with revisions) it’ll increase concerns the labor market is cooling, boost slowdown fears and likely hit stocks.

 

Is the NOB Spread Signaling a “Run Hot” Economy?

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What’s in Today’s Report:

  • Is the NOB Spread Signaling a “Run Hot” Economy?

Futures are in the red but off their overnight lows as traders digest President Trump’s latest efforts to “fire” Fed Governor Cook, rekindling “Fed independence” concerns.

Economically, French Consumer Confidence fell 2 points to 87 vs. (E) 89 in August while Prime Minister Bayrou has called for a confidence vote on September 8, surrounding budget concerns which introduces a renewed sense of market uncertainty in Europe.

Looking into today’s session there are multiple noteworthy economic reports to watch today including Durable Goods (E: -4.0%), Case-Shiller Home Price Index (E: 2.6%), FHFA House Price Index (E: 0.0%), and likely most importantly, Consumer Confidence (E: 96.4).

There is one Fed official scheduled to speak: Barkin (8:30 a.m. ET) as well as a 2-Yr Treasury Note auction at 1:00 p.m. ET, both of which could impact Treasuries and impact equity market trading today.

Finally, a handful of late season earnings releases are due out including: BMO ($2.12), BNS ($1.28), and OKTA ($0.33), but the main earnings catalyst this week will be NVDA’s release later in the week.