The Theater of the Absurd

A conversation between your portfolio and your sanity

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Your Portfolio: Hey, so... we need to talk.

Your Sanity: Oh god, what now? I thought we were doing okay. The S&P was hitting records just last week.

Your Portfolio: Yeah, about that. The S&P 500 fell 2.4% last week, snapping a multi-week winning streak and logging its worst weekly drop in a while. But here's the fun part—nobody seems to know if they should be panicking or celebrating.

Your Sanity: What do you mean?

Your Portfolio: Well, let's start with our friend Jay Powell. A divided Federal Reserve on Wednesday voted to keep its benchmark interest rate steady, with two top officials dissenting. Two dissents! When was the last time you saw the Fed this split? It's like watching a marriage counseling session in real time.

Your Sanity: But they kept rates at 4.25% to 4.5%, right? Some stability?

Your Portfolio: "Stability." That's rich. President Donald Trump urged the central bank to cut rates. Fed Chair Jerome Powell is holding firm — but more and more colleagues don't agree. Powell's sitting there like a substitute teacher trying to maintain order while the principal keeps texting him to change the lesson plan.

Your Sanity: And the tariffs?

Your Portfolio: Oh, the tariffs. Trump on Thursday signed an executive order that adjusted "reciprocal" tariffs on a host of countries, with new duties ranging from 10% to 41%. That latest round of updates raises the effective tariff rate across the entire economy to a range between 15% and 20%. Because nothing says "economic growth" like making everything more expensive.

Your Sanity: But wait, didn't we already have some kind of market crash this year?

Your Portfolio: Ah yes, Starting on April 2, 2025, global stock markets crashed amid increased volatility following the introduction of new tariff policies during what Trump called "Liberation Day." Liberation. From what? Affordable goods?

Your Sanity: So we're basically watching Powell try to manage monetary policy while Trump plays trade war chess with the global economy?

Your Portfolio: It's more like Powell's trying to perform surgery while someone keeps bumping his elbow. Fed Chair Jerome Powell noted that there was still uncertainty on what the impact of tariffs would be on inflation, and that it may take some time to fully see these effects. Translation: "I have no idea what this maniac is going to do next, but I'm sure it'll be expensive."

Your Sanity: What about the markets? Any bright spots?

Your Portfolio: Well, there was that IPO yesterday. The stock, which made its New York Stock Exchange debut on Thursday, closing at $115.50 for a 250% gain during its IPO day. The company ended the day with a market cap of almost $68 billion, after initially selling shares at $33 in its initial public offering. Nothing says "rational market pricing" like a company tripling in value on day one.

Your Sanity: So we have a divided Fed, escalating trade wars, and IPO mania. Anything else I should be worried about?

Your Portfolio: Just the small matter that The derivative market projection for the federal funds rate stands at 3.25% to 3.50% by the end of 2025. The market's betting Powell will cave and cut rates by 75-100 basis points. But here's the kicker—inflation's still lurking, tariffs are pushing prices up, and everyone's acting like this is normal.

Your Sanity: Normal?

Your Portfolio: We live in a world where the President tweets about monetary policy while imposing 41% tariffs, the Fed chair holds press conferences that sound like hostage videos, and companies are worth $68 billion before anyone figures out if they make money. Normal is a memory.

Your Sanity: So what do we do?

Your Portfolio: What we always do. Buckle up and pretend this makes sense. Because somewhere between Powell's poker face and Trump's tariff tantrums, there's money to be made. Just don't ask me to explain the logic.

Your Sanity: I think I need a drink.

Your Portfolio: Make it a double. August is just getting started.

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The absurdist theater of modern finance continues its run. Critics are divided, audiences are confused, but somehow the show must go on. Tickets are priced in inflated dollars and volatile emotions.