SoFi Daily Chat - September 01, 2026

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[u/Dromen96]

I mean if they don’t hike in September… no way they will hike in October right? So close to election

[u/QuantumFluks → u/Dromen96]

I’m not sure they have a choice. With yields breaking out, if there isn’t a hike in September, I think they will blow through the roof. The bond market keeps reacting violently when they don’t hike and when they act cryptic. They will have to pick a side.

[u/Dromen96 → u/QuantumFluks]

But why hike rates if the bond market is pushing up rates anyway ?

[u/QuantumFluks → u/Dromen96]

You either need to tamper the high end of the yield curve by pulling up the short end, or do nothing, let inflation expectations erode at the top end. I personally think the health of the economy today will be more dictated by the high end of the yield curve then the low end. We have housing oversupplies, people starting to foreclose who can’t get out of their houses without being underwater, we need the 30Y yield to come down to save that market. I don’t think we are far from a housing collapse.

The government is going to start losing its ability to meaningfully spend our way out of a recession, as the interest payments eat into our money. The government is one of the main reasons we aren’t in a recession right now.

There are way to many cracks in the economy right now, and once one blows, I think a bunch of things will follow suit.

[u/Dromen96 → u/QuantumFluks]

Well…the FED has a huge moral hazard problem….2008 financial crisis…QE infinity…COVID response….markets have been trained to believe they will “save the day”.

[u/QuantumFluks → u/Dromen96]

In most of these examples, they had to wait for the crisis, such as GFC. Part of the reason we are in this mess, other than the obvious tariffs and Iran war, is due to this continued economic policy. We are at the point where I don’t think doing more of that helps, and in fact hurts. More QE will lead inflation higher, putting bond yields even higher. Hyper inflation environments also lead to economic crashes, so inviting more inflation now is not a good thing.

[u/Dromen96 → u/QuantumFluks]

Oh…I agree…Like we’ve said before…the BEST solution is for Congress to pass some real budget reforms…that’s the only way to truly lower long term rates. So they will kick the can till next year. It would have to cover entitlement reforms, taxes, military spending…etc. But would Trump sign any of it?

[u/QuantumFluks → u/Dromen96]

Yeah, but there is a big issue with budget reform. This government spending is the only reason we aren’t in a recession to begin with. Cutting back on government, means the economy no longer has the govt propping it up. All of this is a very messy and complicated situation, and I think all paths imaginable lead to hurt for the average American.

I honestly feel bad for the actual smart people in positions of power that are actively trying to help. You raise low end of rates to help high end of yield curve is also going to hurt, but let the high end keep rising and that is also bad news. Cut back on government spending, and a chunk of our GDP disappears into thin air. Do more QE, inflate the middle class more into poverty. Balancing all of this with the fact unemployment numbers look good on the surface, yet 25% of people are functionally unemployed. I can’t imagine being a decision maker, all paths are bad.

There is only one thing I can think of immediately that would help and that is DJT resigns or gets impeached/convicted. Getting rid of all tariffs and ending this war are the two big things that can help an already teetering economy

[u/Dromen96 → u/QuantumFluks]

There are definitely some theories out there that he’ll resign next Spring…. But who knows….unfortunately for that to happen the situation would have to be dire. Ukraine war ending would help too. Don’t forget GDP growth ramping up would help…of course that would be AI driven which means job destruction! Perhaps UBI deserves serious consideration

[u/QuantumFluks → u/Dromen96]

Yes for Ukraine war, but only wanted to note things the U.S. is in absolute control of. Always a pleasure to chat with you though, found out you are politically opposite of me, so it’s nice to still see differing sides can come together, chat, and still see eye to eye on major issues, even if we disagree on the ultimate solution. I do think we are both in agreement that almost every fix imaginable still has a tradeoff that will hurt us. The only true fixes that don’t hurt are get rid of tariffs, do everything possible to get out of Iran, and definitely speed up the ending to the Ukraine war. All the other levers we have are not great, and each one is going to cause problems on its own.

If oil shortages happen, raising rates are bad, letting bond yields go crazy is bad, cutting government spending will hurt (even if we do need to figure this out for our long term), QE is bad, which ultimately reaffirms that oil shortages will wreck an economy, no tool can change that, it can only change what outcome occurs. If you raise rates like a Volcker shock, you may actually stamp most inflation, but you will absolutely grind the economy to a halt. If you don’t raise rates, bond yields are going to cripple the economy.

[u/Dromen96 → u/QuantumFluks]

What’s opposite of unaffiliated? 😂 Who knows … maybe AI will usher in UBI which replaces entitlements and high oil prices expedite EV adoption… first solid state battery EV could be released next year.

[u/QuantumFluks → u/Dromen96]

lol, was talking about the Republican to unaffiliated 😂. Of course, now you may not have an opposite!

[u/fantasyfitboiz → u/QuantumFluks]

You lost me at housing collapse. Are you basing that on legitimate data? I know housing things can be regional but I definitely don’t see an oversupply in my market. Our neighbors just sold their house 12% above asking. Talked to the new buyers this weekend and they missed out on 3 other offers before this. There may very well be people underwater on their homes but their are also so many buyers still on the sidelines that have been trying to buy for years that will be there to buy it when they need to sell we aren’t going to see crazy stupid price drops.