The Monday Morning Playbook: Week of July 21, 2025

Good morning,

Let’s get political.

Okay, not that political and hopefully you didn’t just close this email. I probably would have.

But one of the things I really try to do in this publication is not just help investors make better, more profitable investment decisions, but understand what’s really happening in the market. Whether you’re an advisor or a retail investor, it’s important to understand the market’s message, and not just the prevailing news narrative.

And since every time I turn on the TV, the banner is about Trump trying to fire Jerome Powell, I think we should devote a little bit of time to what the market is actually saying about that.

Trump wants to fire Powell because he thinks interest rates are too high. Fair enough. High interest rates definitely seem to be hurting the housing market and have been stubbornly high.

Unfortunately, the Fed controls the overnight lending rate, not average 30-year fixed mortgage rate. And as we look at interest rates, breakevens, risk appetite, credit spreads, and the entire macro landscape, one thing is very clear:

Lowering short-term rates would probably send long-term rates higher.

Now, this might not be the case for forever, but it certainly seems like the reasonable assumption today.

In today’s first section, we’ll break down how the market has been pricing in accelerating economic growth for months, has almost no worries about the economy, and how it reacted to the last few cuts (guess what… long-term rates went up).

Political views should never interfere with investment decisions. We’re in a secular bull market that started under Obama, and has continued through Trump 1.0, Biden, and with the S&P 500 at all-time highs, Trump 2.0.

But there’s no free lunch when it comes to basic economics. If you have higher global growth, higher government spending, and higher inflation, you’re also going to have higher interest rates.

This week’s report will review:

• The message of the bond market

• The equity market reaction to economic data and earnings

• Some areas that are overheated

• Timely long opportunities

• ETF movers

• and more!