By Gayl Mileszko
Market Commentary
Snippets
The summer winds down and our attention is on the sun and the sea, backyard barbecues, and time with the kids before they go back to school. Except for maybe an easy beach read, few have time or interest in scanning anything longer than a paragraph or two over coffee before heading outside. So, this week, we offer just a few thought-provoking snippets in lieu of market commentary:
Question of the Week: Will He or Won’t He?
The 44th gathering of the economic symposium at Jackson Hole, Wyoming takes place this week and traders anxiously await the address of the 17th Fed Chair, Kevin Warsh, on Friday morning, his first major remarks in this world forum. All kinds of wagers are being placed about what he will say on behalf of the U.S. central bank, always the 800-pound gorilla in the room. We can’t help but recall the classic 1950s TV campaign studied by students of advertising and beauty for the 75 years that followed. “Does she… or doesn’t she?” The Miss Clairol ad left viewers wondering about natural versus colored hair, teasing that “Only her hairdresser knows for sure”. This week, we are not sure if the President, the Fed staff, or anyone in the country has an inkling of what Mr. Walsh has to say to the global markets. He could say a lot about his commitment to tackling stubborn inflation, how he views the Treasury’s recent moves to reign in 30-year bond yields, how U.S. fiscal policy, trade, and war strategy impact his views on monetary policy needs, the impact of AI spending on our economy, and what his five new Fed reform task forces are considering. We would welcome any specifics but assume that his speech will contain no major reveals, and that any wait-and-see meme will disappoint the markets. No matter: traders will shift from wondering What Will the Fed Do next month? to What else will the Treasury do this week and next?
No Tinkering Needed: We Are “Back to Normal”
It is not easy for those who have only toiled in the markets since the rating agencies downgraded the sovereign credit of the USA. Many lived through 9/11 and the Great Recession, and some of us go back as far as the 1980s when 10-year Treasury yields hit 15.84%. The man who dubbed American bond investors as the economy’s vigilantes in 1983, Ed Yardemi, just shared his views on the latest jump in long-term rates. “We are back to normal,” he says reassuringly, citing a long history of benchmark yields between 4% and 5% as a sign if a healthy economy, one that provides a reasonable cost of capital without propping up “zombies”. Vigilantes are investors who sell government bonds to drive down prices in protest of fiscal or monetary policies they view as inflationary. A Macquarie global strategist says investors are now demanding an “insanity premium,” extra returns needed to compensate for political, social and policy chaos. The Treasury market at $37 trillion is the largest in the world and the Treasury Secretary insists that current yields do not reflect the underlying fundamentals. He has a big toolkit at his disposal and is starting by doubling his long-bond buyback program. But, interestingly, yields are well below where they stood over a 5-decade period wherein we lived through the energy crisis, Black Monday in 1987, the 2000 dot-com bubble burst, and the 2020 COVID-19 crash. The 50-year average is 5.77% for the 10-year and 6.13% for the 30-year.
Passing the Torch at Your Charter School
Whether it is for the top job at a senior living community, prominent university, or rural health center, the search and interview process can be a lengthy and contentious one. When boards are involved, one of their most important responsibilities is to plan for the succession of the chief executive. And the biggest mistake they can make in a CEO transition is not selecting the wrong candidate. It happens when they fail to plan at all for a succession and have to scramble when a departure or retirement is announced. Two industry professionals with experience guiding and advising on charter school leadership transitions share their insights and experiences in last week’s edition of CharterFolk. We at HJ Sims give a hat tip to Jed Wallace for sharing the contributions from Veronica Conforme and Mollie Mitchell: Beyond “Internal or External”: Three Paths Through a CEO Transition as well as resources from the Charter School Growth Fund.
ETF Mania
US-listed exchange traded funds have took in more than $1 trillion of investment at mid-year, and are on track to reach an all-time high of $2 trillion, a 40% increase over 2025. Goldman Sachs reports that more than 35% of new money has gone into actively managed ETFs, signaling increasing participation on the part of institutional investors. Innovative products and themes are also attracting significant interest from individual investors looking for more customization in their portfolios. Last year, more than 1,100 new ETFs launched; by the end of 2026 we may have more than 6,000 in total, a number that would exceed the number of single stocks. Read more from Goldman Sachs here.
From Bulk Groceries, Eyeglasses, Rotisserie Chicken, Gas, 100-inch TV Screens and Vacations to Medicare Plans
The 70 million loyal U.S. Costco cardholders are about to see the nation’s largest warehouse club enter the Medicare market. The retail giant announced that it is pairing with nonprofit insurer SCAN Group to jointly brand Medicare Advantage and Medicare supplement plans, beginning with a rollout in three states with a combined 5 million of Medicare enrollees. Pending regulatory review and approval, the new senior-focused insurance products may include pharmacy benefits, vision, audiology and more, with no requirement for a paid membership. Approximately 33% of Costco shoppers are Baby Boomers. Read more from SCAN and Costco here.
Hook Hold Harvest and Hide
In regulated industries like finance, medicine, insurance, and government professionals work under very strict social media rules and their firms have rigorous supervisory and recordkeeping requirements. But there are 5 generations of users including investors, stock and bondholders around the world who post, tweet, scroll, share, like, follow, tag, and message on various platforms. Facebook has the largest number of active users at 3.1 billion. Its parent company, Meta, just agreed to pay a mid-trial settlement of up to $17.1 billion to 47 states, place new restrictions on how much time teens can scroll, ban features alleged to stoke mental health issues, and employ an independent auditor. The settlement requires judicial approval. States led by California, Kentucky, Colorado, and New Jersey led the first wave of court action against Meta that began August 18, alleging violations of federal privacy laws and state consumer protection laws prohibiting collection of data on kids under 13 without parental consent. They asked the court to force Meta to remove “certain addictive design features” that lead children to be harmed from its platforms, Instagram and Facebook. Features allowing infinite scrolling, autoplaying videos, disappearing content, beauty filters, and algorithm-dominated feeds are alleged to be harmful to children’s mental health. The federal complaint alleges that Meta deliberately designed Facebook and Instagram to exploit young people’s lower impulse control and heightened sensitivity to rewards. Meta continues to deny the allegations and admits to no violations. California’s deputy attorney general, Megan O’Neill said last week that Meta’s business model is to “hook the users, hold them for as long as they can, harvest their data, and then hide the truth from the public.” YouTube, TikTok, and Snap could face similar charges and penalties.
Ticking Clock
The national debt clock ticked past $40 trillion last week and that created screaming headlines for a day or two, which is just about the maximum limit of our shock these days. The news came as the House and Senate were in the midst of their summer recess, so we have been spared the familiar cries of outrage, the fingerpointing, the references to the existential threat it poses to national security. We have quadrupled our national debt in less than 20 years, and we are hurtling toward $50 trillion without any serious plans for reducing what we owe to holders of U.S. Treasury debt. Will we run out of people to borrow from? Our willingness and ability to pay is not in question, but the amount is growing; it represents 122% of GDP and we are paying an average interest rate of 3.447% on this mountain of debt. The interest now exceeds $2.8 billion a day, $1 trillion a year, drawing close to 20% of total federal spending and draining the pool of discretionary funding available for housing and education, transportation, research, and other programs. Over the past half century, a number commissions, bills and orders have failed to tackle the problems of debt and deficit: Grace Commission, sequestration, debt limits, Simpson-Bowles. Not even the downgrade of our triple-A sovereign ratings in 2011, 2023 and 2025 produced a consensus for some combination of taxes and spending cuts. It was 25 years ago when a fortuitous combination of factors last produced a budget surplus. On August 26, 2001, our outstanding debt totaled $5.77 trillion, the 10-year Treasury yield stood at 4.92% and the 40-year at 5.46%. Today with a budget deficit of $1.8 trillion and debt of $40 trillion, the 10-year Treasury yields 4.64% and the 30-year 5.18%. The global markets are not rattled, the dollar and our bills, notes and bonds are still in demand. President Trump argues that the way we take care of debt is growth. He has also asked Secretary Bessent to work with OMB on fiscal consolidation. We are by no means alone in this pickle: global sovereign debt exceeds $348 trillion.
Working 9-to-5 to 75 and Beyond
Dolly Parton was 34 years old when she wrote the hit single “9 to 5” in 1980 for what has since became a cult classic comedy featuring Lily Tomlin (then 41) and Jane Fonda (43). Parton was born in 1946 right at the start of the Baby Boom, and she worked and sang all the way through age 80. Her life and career are being celebrated this week; the Empire State Building lit up in pink sparkle at 9:25 pm last night to honor this American music legend and the President has ordered flags to half-staff for the next week. Fonda, now 88, and Tomlin, 86, both members of the Silent Generation, are still active. They represent a growing number of older Americans who are now working far beyond the traditional retirement ages. Senior living operators are not surprised. They have been seeing the trend. AARP reported in June that the number of working adults over 65 has tripled over the past 25 years, and projections are that those aged 75+ will double by 2060, all because they love or need to work, need health coverage, and want social engagement. ASHA published a financial profile of senior living residents in rental communities in May of 2026, with some findings summarized by Senior Housing News, It means that senior living communities and even care communities are finding a need to incorporate office space in unit designs or renovations, business centers, conference, meeting and co-working spaces, job postings and other amenities for those working part-time and full-time. We at HJ Sims hope that all who can are able to enjoy this Labor Day holiday to honor and celebrate the many contributions of our talented and dedicated workforce, young and old and all who contribute to our nation’s innovation economy, and unsurpassed achievements.