The US has run two labor supply shocks in five years, pointing opposite ways. After 2021-2024 immigration increased the population by the number of total unemployed Americans, the 2025 policy reversal was just as powerful. What was initially a supply-side economic policy that suppressed wages and inflation is now the exact opposite.

Full blown fake news headline assault today from the administration. Is this 3+ tries in half a day? 1/ "Mediators expected to hold separate talks with the US and Iran on Monday or Tuesday" 2/ "Trump Ready to Ease Sanctions, Release Frozen Assets for Nuclear Progress" 3/ "Iran has agreed to halt uranium enrichment in exchange for the easing of US sanctions" Meanwhile oil and yields not buying it.

Tim foil hat asks why suspected terror threats would be released on bail. Was it a nothing burger/false flag to begin with? Or a trial balloon for something bigger?

One data point the Fed has yet to mention is the stabilization of wage growth in recent months. My guess is they'd rather not draw attention to it but they will be forced to if it continues. Historically they have been more reactive to this data point relative to most.

While the wage growth premium of high-earners relative to low-earners has somewhat rebalanced, the capital-labor inequality hasn't. After the immigration-induced supply shock lowered wages for the bottom half of the K-shaped economy, boosting corporate profit margins, AI is now doing that for the top half. This is one of the many reasons why we are seeing the Trump administration's approval ratings and polling numbers near record lows into consequential midterms. They haven't delivered on the populist agenda that got them elected.

Not that this is a new or novel view, but listening to Bessent gives it away that there is no deal happening with Iran. None of the below are things you'd say if you were close to a negotiated agreement. Bessent on Iran: "Iran's economic isolation will be implemented in phases and includes cryptocurrencies, aviation, and maritime transport... ...There's only 15 million more barrels of Iranian oil on the water. Iran will have nothing left to trade for anything... ...Probably within the next two weeks, they're going to make their final deliveries of oil to China, and then they will have nothing."

October Fed hike odds have now risen to ~64%. We still believe they are underpriced. We don't believe the "they won't hike a week before midterms" argument is adequate. No meeting in November means a slow-to-act Fed risks falling behind.

Median wage growth for the high school or less education cohort has been +3.8% in every single month of 2026. Over the same period, bachelor's degree or higher wage growth fell from 4.4% to 3.9%. The first statistic shows the lack of labor slack amongst lower-wage workers and the latter shows the effects of AI on white-collar jobs. Look for wage inflation to first rear its head in the former when economic demand picks up into a constrained supply.

Scouting the Tape #34 is out. This issue covers our thoughts across the market - recent economic strength, Fed policy implications, oil markets, cross-asset volatility and more. Have a great weekend!

October will be even more challenging.

The economy acts a lot differently than we're used to when breakeven payroll growth (the monthly job creation needed to hold unemployment rate flat) is effectively zero. These effects are still causing disagreement and confusion amongst policymakers and economists today.

I've been following the Credit NFT collection launch by @jackbutcher via @XMoney and am quite intrigued. The art is cool, the X money transaction mechanism is novel and the mechanics are interestingly designed. There's an interesting supply/demand dynamic to them also. After launching a few nights ago, there are ~122,000 Credit NFTs in circulation. In ~1 week, you can burn 80 Credits to make a Statement NFT, equating to 1,526 total possible Statements (~122,000/80). If launched today, ~392 Statements would be able to be minted across ~241 holders (~26% of the total available Statements). For the full 1,526 to be able to be minted, ~37,000 Credits would need to be acquired by other wallets with less than 80. There are ~9,000 Credits listed on @opensea right now. More can be listed at any time and there's nothing that says all Statements need to be minted, but it will be interesting to see how this experiment plays out.

We've released a new long-form thought piece today: The Secular Inflation Series, Part 1 — Immigration and Labor Force. It's part one of a three part series that dissects the ramifications of stimulative economic policies into an economy with material supply constraints. The difference between inflation and stagflation is simply where we're at in the business cycle because the underlying structural forces are locked in for years at a time.

New high in QQQ/IWM. Must be main street's turn again... There's a reason the odds of a Dem sweep are going vertical.