Debt! NoKo! Irma! DACA! Cohn! …and Other 4-letter Words

With a hike to the debt ceiling now likely, long-term yields have probably seen the worst. With the legislative calendar cleared and Trump on a road-show with renewed political capital, pro-growth tax cuts are more likely than ever, and still not anticipated by the markets. Fischer’s retirement is no surprise. Yellen may have disqualified herself at Jackson Hole, and Cohn is rumored to be out of the running. Appointment of a permahawk remains an overhanging risk. Trade threats against China aimed at securing help with North Korea risk a trade war in order to prevent a nuclear war. Kim may stage more demonstrations on the anniversary of 9/11. A negotiated solution is the most likely outcome, but it will take military and trade threats to get to it.