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The Ledger Letter
Finance Studio Advisors · Thursday, August 13, 2026
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Market Intelligence Partner
In 2022, the last time the Fed made a major shift, the 60/40 portfolio had one of its worst years on record.
Bonds collapsed, stocks fell… there was nowhere to hide.
Larry Benedict saw it coming. He went 11-for-11 while most investors had no idea what hit them.
He says the same pattern is setting up now — on a much bigger scale.
This is a paid advertisement for Brownstone Research. Past performance is not indicative of future results. All investing carries risk, including the possible loss of principal. The claims and forecasts expressed above are those of the advertiser.
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Payrolls Fell. Bettors Still Price a Hike. PPI Lands at 8:30.
July payrolls fell by 23,000. Yesterday’s CPI cooled to 3.4%. Stocks nodded and rallied. The bond curve and the betting book didn’t. Kalshi still prices 36% odds of a September hike and 1.5% of a cut. PPI prints at 8:30 a.m. Eastern — three hours to see which tape was reading yesterday’s paper.
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The Breakdown
Today’s disagreement: the labor tape is pricing weakness that demands a cut; the rates and betting tapes are pricing a Fed that might still hike.
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| 01 |
The Loud Fact
July CPI printed 3.4% year-over-year, down from 3.5% and matching the whisper. Headline moved 0.1% for the month; core moved 0.2%. The S&P closed at 7,748.50, up 0.26%. The Nasdaq did the heavier lifting, up 0.54% on a chip-led bid. That’s the tape your inbox is leading with.
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| 02 |
The Quiet Fact
Under the rally, nothing moved. The 10-year closed at 4.69%. The 30-year sat at 5.25%, still near its 2007 high. Kalshi prices 36% odds of a September hike, 1.5% of a cut. The rate curve and the betting book heard the CPI print and shrugged.
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| 03 |
The Historical Anchor
The July FOMC voted 9–3 to hold. Three dissents wanted to hike — the most hawkish split since 2016. And that was before the July jobs report shed 23,000 payrolls against a forecast for gains of 83,000. The committee that dissented toward a hike now has a labor tape arguing for a cut.
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Yesterday, by the Numbers
| 10-Year Treasury Yield | 4.69% — flat; 30Y at 5.25% |
| Kalshi Sept Hike Odds | 36% — cut odds 1.5% |
| S&P 500 | 7,748.50 (+0.26%) |
| Gold Spot | $4,413/oz (+0.83%) |
| DXY Dollar Index | 99.83 — near the 100 line |
Wednesday’s close per CNBC, Yahoo Finance, and Fed H.15. September rate odds per Kalshi and Polymarket. Two-year yield: 4.25% (Fed H.15, latest publication).
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The Print That Picks a Side
What Yesterday’s Rally Was Selling
Every headline yesterday read the same way: CPI cooled, rate-hike fears eased, stocks climbed. Fair enough. Headline inflation printed 3.4% year-over-year and 0.1% for the month. Core held at 2.5% annualized. The S&P closed at 7,748.50, up 0.26%. The Nasdaq did the heavier lifting on a chip-led bid. That’s the tape most of your inbox is telling you about today. It isn’t wrong. It’s incomplete.
The Curve Refuses to Cut
The bond market watched the same CPI print and didn’t blink. The 10-year closed at 4.69%, roughly where it opened. The 30-year sat at 5.25%, still parked near its 2007 high. The betting book is louder: Kalshi and Polymarket assign roughly 36% odds to a September hike, near 63% to a hold, and 1.5% to a cut. The rate curve and the betting tape are pricing the same Fed. Equities are pricing a different one. Meanwhile gold sits at $4,413 — a ‘neither side wins’ hedge that keeps getting bought.
Where This Hits Your Statement
Two contradictory pricings sit inside your portfolio right now. If bonds are right — higher for longer, one more hike a live risk — the multiples on the growth names that led yesterday’s rally are borrowing against a discount rate that isn’t coming down. If stocks are right — the Fed sees the July jobs miss and pivots — the 30-year at 5.25% is a gift and duration is underowned. You cannot buy both premises. The July FOMC voted 9–3 to hold, with three members wanting to hike, the most hawkish dissent since 2016. Payrolls in July fell 23,000 against a forecast for gains of 83,000, and prior months were revised down by roughly 100,000 combined. The committee that dissented toward a hike now has a jobs report arguing for a cut and a CPI print arguing for nothing at all.
The Tripwire at 8:30
PPI prints at 8:30 a.m. Eastern. Consensus: +0.1% headline for the month, +0.3% on core, headline year-over-year slowing from 5.5% to 4.8%. Watch the front end. If two-year yields fall five basis points or more on the print, the bond market has capitulated on the hike scenario and is joining the equity read. If two-year yields rise three basis points or more, the curve is doubling down on higher-for-longer, and yesterday’s equity rally fades by the open. A print on consensus keeps the standoff alive into Friday’s retail sales, and the September dot plot becomes the referee.
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One of these tapes is going to look, in three hours, like it was reading yesterday’s paper.
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The Ledger Letter
When markets disagree, the signal is in the disagreement.
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This newsletter is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results.
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