Broadcast EView
- 6 days ago
- 15 min read
Wide Ranging Perspectives and Views for Managing Retirement Assets.
LayLine Broadcast EView
LayLine Asset Management Inc
Harry J. Campbell III, CMT
6/16/26
Changing of the Guard at the FED
The FED is meeting today and tomorrow to discuss where the FED Funds Rate should be set, and as important, whether the bias towards cutting the FED Funds Rate should be removed from their communication release on Wednesday. That is burying the lead. The real goings on is that the FED has a new “Chair”, Kevin Warsh. He has experience at the FED (he was a Governor from 2006 -2011), he has extensive experience in the financial markets, and like his predecessor, he has a law degree. His bio is worth a quick read.
All eyes will be on Chair Warsh’s 1st press conference on Wednesday. Here are a couple of topics the markets will be interested in hearing what Chair Warsh is thinking about.
The Dot Plot: If you don’t follow the FED (don’t blame you) you may not be aware that every once in a while the members of the Board of Governors write down their best guess for the FED Funds Rate at different points in the future. The FED staff plots each estimate for each time period for each Governor. The result is what is referred to as the “Dot Plot”, showing where each Governor thinks the FED Funds Rate will be at specific points in the future. The original intention of the dot plot was in the name of transparency. However, over time, many FED watchers claim that it just muddies the water, so to speak. Chair Warsh has at times voiced hesitation with the dot plot.
Communications: There is some building consensus that the FED provides too much communication and it should be toned down. For years you could hear the refrain, the FOMC “Federal open mouth committee” rather than it official name, Federal Open Market Committee. Many market participants firmly believe that more information, and more often, is better when it comes to preparing the financial markets for FED actions. Others presume that fewer conversations creates less variation in the message, providing more clarity for the markets. Chair Warsh is thought to prefer less over more.
FED Independence: There has been much discussion about how the executive branch and Chair Warsh will interact. The FED is a committee, the Chair only has one vote. Granted the Chair’s vote carries a lot of weight, it is only one vote. The executive branch would need to hold sway over half of the twelve voting members to compromise FED independence. At the same time, the executive branch has the same rights to public expression as anyone. Perhaps, if the FED communicates less with the markets, the executive branch could communicate less with the FED.
FED Balance Sheet: Chair Warsh has hinted that he would like to see the FED balance sheet smaller then it is now. The issue confronting that idea is that shrinking the balance sheet is in effect constricting growth in the economy by withdrawing capital from the capital markets. Simplistically, the FED sells assets to reduce its balance sheet, at the same time the sale removes capital from the capital markets, reducing available capital for companies to fund growth, slowing overall economic growth. The FED may resort to slowly reducing the balance sheet to put downward pressure on the economy to reduce inflation without raising the FED Funds Rate. The issue for Chair Warsh is that inflation is here now and it will take some time for any reductions in the balance sheet to take hold. It is always a delicate balancing act for the FED to comply with their dual mandate, but reducing the size of the balance sheet, adds in a whole new level of complexity.
It’s been eight years since we have had a new FED Chair. At that time inflation (PCE, personal consumption expenditures) was ~ 2.2% and the unemployment rate was ~3.9%. Currently, PCE is ~3.8% and the unemployment rate is ~4.3%. Based on the FED dual mandate, price stability and full employment, the new FED Chair has his work cut out getting inflation back under control and moving it down towards the FED 2% inflation target, and at the same time keeping the employment side of the mandate running at or near full capacity.
Harry
LayLine Asset Management Inc
Harry J. Campbell III, CMT
5/19/26
Interest Rates and the Economy
Interest Rates are on the rise, the 30yr Treasury hitting its highest level since 2007. Here is a quick look at some economic relationships and beneficial outcomes to contemplate as Interest Rates move up and down. As you read this, keep in mind that when it is suggested that Rates are moving up that means bondholders are seeing the value of their bonds go down. The opposite applies when Rates are going down, bond values are on the rise.
· Banks with loads of Treasuries and corporate bonds on the books want Rates to be going down to boost the value of the bonds, so the bank can loan more and take in more interest income on those loans.
· Companies looking to grow and need capital to fund that growth want Rates to be lower so they can afford more capital to grow more.
· Savers and investors want higher yields on their investments to provide more income on a fixed level of investments.
· Individuals want lower Rates to lower the cost to finance large purchases and homes so they can afford more.
· Governments want lower Rates to lower the cost of funding operations and capital needs.
Most parts of the economy prefer lower Rates. The issue is that inflation also tends to prefer lower Rates. Most economic folks consider inflation, first and foremost, a monetary issue. Basically it’s the idea that too much money chasing too few goods causes an imbalance between supply and demand, pushing prices up. Along the same line, lower Rates stimulates rapid capital formation (too much money) rapidly increasing spending on capital goods, outstripping available supplies, resulting in upward pressure on prices. Higher Rates have the opposite effect, it suppresses growth (loans cost more) and spending (capital goods), pressuring prices lower, or just not up as fast.
Over the past couple of years the FED has been cutting Rates as inflation came down. However, recent inflation numbers suggest that inflation is stronger than the FED would prefer (way above the FED target of 2%) and inflation is developing some troubling persistent (sometimes referred to as sticky) at these levels. The prescription would be for the FED to raise Rates, but that comes with the unfortunate side effect of slower growth, something the FED appears to want to avoid as they have not raised Rates, yet.
As mentioned in the open, the long-term Treasury Bond (30yr) is at its highest level since 2007, 5.197%. It would seem that the bond market is doing the FED job by pushing long-term Rates to twenty year highs and 2yr Treasuries above the FED Funds Rate, effectively tightening credit across the curve and providing a little test of the new incoming FED Chair.
Harry
LayLine Asset Management Inc
Harry J. Campbell III, CMT
4/21/26
Medicare: Part A, B, C, D
(Updated for 2026)
All of the information provided below is from the Medicare.gov website. I did take the liberty of re-organizing the information, but the content has not been altered (In some cases I was tempted, but refrained from doing so). With all the different stipulations, conditions, deductibles, co-pays, out of pocket costs, coverage, enrollment periods, variations between states, everyone’s situation is unique; financial and medical condition, location, etc., the information provided in this Broadcast EView does not, and cannot, provide enough information to make an educated decision on this matter. This is just intended to provide a general overview of the options available under Medicare, For more details pertinent to your situation visit Medicare.gov.
Original Medicare
Includes Part A (Hospital Insurance) and Part B (Medical Insurance).
If you want drug coverage, you can join a separate Medicare drug plan (Part D).
You can shop for an Advantage Plan (Part C) or Medicare Supplement Insurance (Medigap) policy to help pay your out-of-pocket costs (like your Part B 20% coinsurance).
Part A : Hospital Insurance
Usually free, covers 100% of inpatient hospital care for 60 days after a $1,736 deductible (for most), then after 60 days there is a daily copay.
Part B: Medical Insurance
Standard premium for most: $202.90 for 2026, (2025 it was $185.00)
Covers 80% of the allowable cost for most medical bills.
You pay the remaining 20% of costs, after you meet your deductible.
There’s no yearly limit on what you pay out of pocket, unless you have supplemental coverage—like Medicare Supplement Insurance (Medigap), Medicaid, employer, retiree, or union coverage.
You can choose to buy a Medicare Supplement Insurance (Medigap) policy to help pay your out-of-pocket costs that Medicare doesn’t cover (like your 20% coinsurance).
You can join a separate Medicare drug plan to get Medicare drug coverage (Part D).
Can use any doctor or hospital that takes Medicare, anywhere in the U.S.
Part C: Medicare Advantage
A Medicare-approved plan from a private company that offers an alternative to Original Medicare (Part A & Part B) for your health and drug coverage. Most plans include prescription drug coverage.
Medicare Advantage is a Medicare-approved plan from a private company that offers an alternative to Original Medicare for your health and drug coverage. These “bundled” plans include Part A, Part B, and usually Part D.
In many cases, you can only use doctors who are in the plan’s network.
Plans often have different out-of-pocket costs than Original Medicare or supplemental coverage like Medigap. You may also have an additional premium.
Plans may offer some extra benefits that Original Medicare doesn’t.
All your Part A and Part B benefits are provided by Medicare-approved private companies. For some services, plans may use their own coverage criteria to determine medical necessity.
You may need to get approval (prior authorization) from your plan before it covers certain services or supplies.
In many cases, you can only use doctors and hospitals in the plan’s network (for non-emergency or non-urgent care).
You pay the monthly Part B premium and may also have to pay the plan’s premium.
Plans have a yearly limit on what you pay for covered Part A and Part B services (with different limits for in-network and out-of-network services).
Part D: Medicare drug plan
A Medicare-approved plan from a private company that helps cover your prescription drug costs.
Adds separate drug coverage to Original Medicare.
You can generally switch plans once a year.
Each plan can vary in cost and specific drugs covered.
Premium ranges reflect different plan pricing.
Medigap policy
Extra insurance you can buy from a private company to help pay your out-of-pocket costs that Original Medicare doesn’t cover. Medigap cannot be used with an Advantage plan. Policies are standardized, and the basic benefits in each are the same. Most policies don't include prescription drug coverage.
Helps pay your out-of-pocket costs that Original Medicare doesn't cover (like your 20% coinsurance).
Your benefits won't change, and the company can never drop you, as long as you pay premiums.
Premium ranges reflect the different prices companies can charge for the same policy.
You get a 6 month “Medigap Open Enrollment” period, which starts the first month you have Medicare Part B and you’re 65 or older. During this time, you can enroll in any Medigap policy and the insurance company can’t deny you coverage due to pre-existing health problems. After this period, you may not be able to buy a Medigap policy, or it may cost more. Your Medigap Open Enrollment Period is a one-time enrollment. It doesn’t repeat every year, like the Medicare Open Enrollment Period.
Medicare Open Enrollment Period October 15-December 7
You can:
Join, drop, or switch to another Medicare Advantage Plan (or add or drop drug coverage).
Switch from Original Medicare to a Medicare Advantage Plan or from a Medicare Advantage Plan to Original Medicare.
Join, drop, or switch to another Medicare drug plan if you’re in Original Medicare.
Special Enrollment Periods
You can make changes to your Medicare Advantage and Medicare drug coverage when certain events happen in your life, like if you move or you lose other coverage. These chances to make changes are called Special Enrollment Periods. The types of changes you can make and the timing depend on your life event. If you have questions or need help making enrollment changes, call 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048.
Harry
LayLine Asset Management Inc
Harry J. Campbell III, CMT
3/17/26
Update: The Watch
Last month in the Broadcast EView I listed several areas that I was closely watching for indications for the economy and the markets. Of particular relevance is how quickly things are happening in the economy and markets. Below are updates on the subjects discussed last month.
AI: I’m watching for indications to see if (1) all the doom and gloom for jobs and many businesses will actually come to be or (2) will we witness AI providing new opportunities for employees, businesses and governments.
Update: Couple of observations. I’m seeing many layoffs in the shipping and logistics corners of the economy. This is an area that will be benefitted by AI ability to analysis so much more information, faster, to determine the best combinations of loads and routes. Also seeing layoff announcements from many tech companies as they incorporate AI into the process of writing code. Some of the giant social media companies are laying off a large percentages, up to 30% or more, of their workforce as AI handles more of the current work load. What we haven’t seen (too early in the transition) are the new jobs, that we don’t know exist yet. The delay between the reduction in the old economy jobs and the addition of the new economy jobs will define the degree of economic pain coming up.
Jobs Outlook: Between AI potential to obsolete many jobs, an older population demographic issue, and less immigration available for jobs, there are going to simply be fewer employees available in the US. However, when combined with the potential productivity gains from AI, perhaps the US economy can operate with fewer employees and still manage to expand at a good pace.
Update: The latest jobs report was by most accounts, very disappointing. The unemployment rate rose to 4.4%, nonfarm payrolls decreased by 92,000, and December jobs were revised lower by 65,000 jobs to a negative 17,000 jobs. January jobs were up 126,000. In other words, and until the next revision, for the past three months the total number of jobs created was only 17,000, or about 6,000/month. Based on the jobs data from the past couple of months, outside of healthcare, jobs are not only becoming hard to find but also difficult to hold on to.
Economy Expansion: Current GDP (gross domestic product) estimates for the near future (one year out) are indicating a steady, if not a slightly lethargic economy with 1.8% annual GDP growth for 2026 (2025 annual GDP growth was 1.5% - 1.9%).
Update: The most recent GDP estimate for the 4th quarter is now down to 0.7%, or about half of the prior estimate of 1.4%. While that is certainly not the direction of growth we would like to see, drawing a conclusion from the 4th quarter considering the government shutdown (still a large part of the economy), is challenging and misleading at best. That said, we are not seeing the general economic growth that many hoped for at this point in the AI cycle.
Supreme Court Tariff Decision: An adverse ruling for the Administration will instill considerable chaos in the international trade and financial ecosystem. It will take some time for the US put something else in place and delays will further complicate international trade.
Update: The court did rule against the legality of the process used to impose the first round of tariffs in 2025. The fight for refunds and financial relief from the tariffs will take quite some time to play out. In the meantime, another round or form of tariffs are being put in place, with different legal status. We will see. Regardless, combining the new tariffs with the dislocations in international trade from the war with Iran, will make it near impossible to ascertain the net effects of the new tariffs and refund/relief process on international trade anytime soon.
Mid-Term Elections: If the current political structure remains roughly the same, I would expect more of the same for the markets and economy. If the political structure shifts dramatically one way or the other, the markets and economy will have to work through considerable change and uncertainty, something that few markets or economies are good at handling.
Update: It's way to early for any update in this area.
Harry
LayLine Broadcast EView
LayLine Asset Management Inc
Harry J. Campbell III, CMT
2/17/26
The Watch
Here are a couple of areas of interest that I have been intently watching, looking for signs as to how our economy and markets will respond as these areas of interest develop over the next year or so.
AI: So far, watching the development of AI (artificial intelligence) has been, and will likely continue to be, worth the price of admission. It looks to me that AI will dramatically effect, in ways we can’t foresee as of yet, most if not all of the corners of the economy. To state the obvious, those effects will be challenging for some and an opportunity for others. I’m watching for indications to see if (1) all the doom and gloom for jobs and many businesses will actually come to be or (2) will we witness AI providing new opportunities for employees, businesses and governments.
Jobs Outlook: From my vantage point, it looks to be too early to draw any investable conclusions related to the jobs market, its size, and composition. Between AI potential to obsolete many jobs, an older population demographic issue, and less immigration available for jobs, there are going to simply be fewer employees available in the US. However, when combined with the potential productivity gains from AI, perhaps the US economy can operate with fewer employees and still manage to expand at a good pace.
Economy Expansion: Current GDP (gross domestic product) estimates for the near future (one year out) are indicating a steady, if not a slightly lethargic economy with 1.8% annual GDP growth for 2026 (2025 annual GDP growth was 1.5% - 1.9%). I’m watching closely for signs that increased productivity from AI adoption can accelerate GDP growth, even with fewer employees and without pushing inflation up.
Supreme Court Tariff Decision: We will know soon how the Court will decide on the legality of current US tariffs. A ruling in favor of the Administration and things stay continue in place as is. An adverse ruling for the Administration will instill considerable chaos in the international trade and financial ecosystem. It will take some time for the US put something else in place and delays will further complicate international trade.
Mid-Term Elections: Regardless of political affiliation, this mid-term election cycle is going to be more stimulative than most mid-term elections. Looking out to next fall, if the current political structure remains roughly the same, I would expect more of the same for the markets and economy. If the political structure shifts dramatically one way or the other, the markets and economy will have to work through considerable change and uncertainty, something that few markets or economies are good at handling.
Like in sailboat racing, one needs to be on the lookout and watch for shifts in the wind and be ready to act on them.
Harry
LayLine Broadcast EView
LayLine Asset Management Inc
Harry J. Campbell III, CMT
1/20/26
Effective Income Tax Rates
(originally published 4/15/25, updated for the 2025 senior deduction)
I thought it would be appropriate as we approach tax day to examine what we actually pay as a percentage of our income in Federal taxes, referred to as an effective tax rate. With so many variabilities to the tax code, for this discussion, only the standard deduction, the 2025 senior deduction, married filing status, and published tax brackets rates will be considered. This discussion is only meant to provide some understanding of what an effective tax rate is, and not to provide a thorough understanding of effective tax rates. Please contact an accountant for your specific circumstances. Income brackets, tax bracket rates, senior and standard deduction are for 2025.
Starting with the income and tax bracket rates. It’s important to recognize that a particular tax rate only applies to the income in that tax bracket. I.e., the 12% tax bracket rate only applies to income between $23,851 to $96,950. Here are the first two tax brackets for a married filer for 2025 and the taxes on the maximum income of that income bracket.
Income Bracket Tax Bracket Rate Taxes
$0 to $23,850 10% $2,385 ($23,850*.10)
$23,851 to $96,950 12% $8,772 ($73,100*.12)
So, before considering the effect of the standard and senior deduction on effective tax rates, consider on an income of $96,950, the taxes due would be $11,157 ($2,385+$8,772). This results in an effective tax rate of 11.5% ($11,157/$96,950)
Now let’s consider the effect of the standard deduction, and for seniors (65 and older) the $6,000 senior deduction, on the effective tax rate. The standard deduction in 2025 for those filing as married is $30,000. Married seniors filing joint get an additional $12,000 deduction ($6,000 for each spouse), for a total of $42,000 deduction. For all intents and purposes this means that married filers don’t pay federal income taxes on the first $30,000 of income and married senior filers don’t pay on the first $42,000 of income.
On an income of $96,950 used in the above example, taking the standard deduction for married filers of $30,000 would leave a taxable income of $66,950 ($96,950-$30,000) and taxes of about $7,557 ($2,385 plus 12% on $43,100 ($66,950 - $23,850) = $5,172), resulting in an effective tax rate of 7.8% ($7,557/$96,950). For seniors with an income of $96,950, taking the $42,000 deduction would reduce taxable income to $54,950 ($96,950-$42,000) and taxes of about $6,116, resulting in an effective tax rate of 6.3% using the same math.
In summary, without any deductions on $96,950 the effective tax rate for a married filer would be 11.5%. Figuring in the standard deduction it moves down to about 7.8% and with both the standard deduction and the senior deduction the effective tax rate is around 6.3%, substantially lower than the 12% stated tax rate for an income of $96,950.
Take a look for yourself. When you get your 1040 Tax Return back, divided your adjusted gross income (line 11a on IRS Form 1040) by your taxable income (line 15 on IRS Form 1040). This is a close and simple approximation of your effective tax rate.
Harry
CMT: Chartered Market Technician
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