The Internal Revenue Service (IRS) and the Department of the Treasury plan to propose regulations for a federal retirement savings incentive program, including eligibility criteria and income thresholds for qualifying for such benefits.
Aimed at low- and moderate-income taxpayers, the IRS Saver’s Match is a new federal program that seeks to promote retirement savings. In general, Saver’s Match will replace the existing Saver’s Credit program for taxable years beginning in 2027.
Under the program, the government will provide eligible taxpayers up to 50 percent of the first $2,000 in retirement savings contributions made to an employer-sponsored retirement plan or IRA.
The amount caps at $1,000 annually and will be paid to eligible individuals beginning in 2028 based on the retirement contributions they made in the 2027 tax year, the IRS said in an Aug. 7 statement.
In a notice issued on Friday, the IRS and the Treasury described regulations that they expect to be in the forthcoming proposed rules.
Four types of retirement savings contributions would qualify for Saver’s Match: contributions to a Roth or traditional IRA; contributions made to a section 501(c)(18) plan; certain voluntary, after-tax employee contributions to a qualified retirement plan; and elective deferrals, such as those made to a section 401(k) plan.
“Millions of low- and moderate-income Americans will have the opportunity to strengthen their retirement savings through the Saver’s Match program,” IRS Chief Executive Officer Frank J. Bisignano said in the statement.
“The Saver’s Match makes saving easier and more rewarding by providing a direct federal contribution to an eligible taxpayer’s retirement account. The notice is an important first step in implementing President [Donald] Trump’s Executive Order with respect to the Saver’s Match program,” Bisignano said.
Bisignano was referring to the “Promoting Retirement-Savings Access for American Workers by Establishing TrumpIRA.gov” executive order signed by Trump on April 30.
In the order, Trump said that tens of millions of Americans lack access to employer-sponsored retirement plans, with small-business workers, independent contractors, the self-employed, and part-time workers facing “unnecessary barriers to saving for retirement.”
The administration intends to ensure these people can obtain up to $1,000 in matching savings they make, Trump wrote, while calling for increased public awareness of the Saver’s Match program.
The order directed the Treasury Secretary to establish the TrumpIRA.gov website by Jan. 1, 2027, to provide individuals with information on low-cost, high-quality IRAs.
In its latest statement, the IRS said that the agency and the Treasury anticipate TrumpIRA.gov will list financial institutions that offer IRAs and accept Saver’s Match contributions.
According to the TrumpIRA.gov website, roughly 41 million American workers aged 18-65 lack access to employer-provided retirement plans.
“A 25-year-old worker who saves about $165 per month and qualifies for a $1,000 annual Saver’s Match could retire with roughly $465,000 at age 65,” the website said.
Out of the $465,000, almost $155,000 is expected to come directly from the Saver’s Match contributions. The calculations assume an annual return of 6 percent.
Income Thresholds, Saver’s Credit
To qualify for the Saver’s Match, an individual must be at least 18 years old during the taxable year, according to the IRS and Treasury notice.
For 2027, single filers with a modified adjusted gross income of $35,500 or more do not qualify for the Saver’s Match. The same limit applies to married people who file separately.
For married couples who file jointly, the threshold is $71,000, and for the household head, the maximum limit is $53,250.
For taxable years after 2027, these thresholds will be adjusted based on inflation. The Saver’s Match claim must be made through a separate Form 8880-A.
While Saver’s Match will replace the existing Saver’s Credit program, for certain contributions made to Achieving a Better Life Experience accounts, Saver’s Credit will continue to be available.
Unlike Saver’s Match, which is an amount directly paid to a person’s retirement account, Saver’s Credit offers a nonrefundable tax credit as an incentive.
Meta Releases Muse Glimmer, A 30B Model That Runs On A Single Consumer GPU
Meta released Muse Glimmer on Monday, a 30-billion-parameter model built for agent work that fits on a laptop. The company published the model’s weights – the trained numbers that make up the model itself, meaning anyone can download it and run it on their own machine – on the model repository Hugging Face, under an Apache 2.0 license that is genuinely permissive, without the usage restrictions Meta attached to its Llama releases.
The model is aimed at a specific and increasingly crowded target: AI that runs on your own hardware instead of somebody else’s cloud. Google has Gemma, Alibaba has Qwen, Mistral and DeepSeek both ship small open models. Meta is arriving late to a category it arguably created and then abandoned.
What It Is
Glimmer was built from Muse Spark, Meta’s frontier model, using a technique called distillation: you train the small model on the big model’s output until it learns to imitate what the larger system already knows.
Then there’s the problem of making it fit. A 30-billion-parameter model at full precision needs more than 55GB of memory, which no consumer graphics card has. Meta compressed the numbers that make up the model down to roughly a quarter of their usual precision, shrinking it to under 20GB – small enough to leave room for everything else the model needs running alongside it inside a 24GB or 32GB card. The company says the compression costs little or nothing on the tasks that matter.
Speed comes from a second trick, called speculative decoding. Models normally write one word at a time, each one waiting on the last, which is why long answers feel slow. Meta pairs Glimmer with a small, fast companion model that predicts whole chunks of text, then has the real model check the guesses all at once and keep whatever it got right. It works because checking an answer is much faster than producing one. Meta reports the result is 3.1x faster on an RTX 5090, 1.8x on an M5 Max, and 1.5x on an M4 Max.
Meta has positioned Glimmer against Google’s Gemma4-31B and Alibaba’s Qwen3.6-27B, and claims strong results on tests that measure whether a model can complete a multi-step job start to finish – fixing real bugs in real codebases, calling outside tools, recovering when something fails. Those are the company’s own numbers from the company’s own testing, which is worth remembering until outsiders get their hands on it. As of Monday, they can.
Meta CEO Mark Zuckerberg says a version of Spark itself will follow in the coming weeks, with larger models after.
Models you can download are cheaper to run and easier to customize than models you rent, and the strongest downloadable ones increasingly come out of China – DeepSeek, Alibaba, Moonshot. Zuckerberg’s argument is that American labs are hobbled by training-data restrictions their foreign rivals don’t face, and that blocking foreign models is the wrong answer to that.
“US policy must reduce this additional friction if we want American open source models to lead over time,” he wrote.
He also wants distillation protected as a matter of policy – “you can learn from anything you can observe.” Glimmer is a distilled model, released the same morning, so the principle has a beneficiary.
Meanwhile
The model came wrapped in a 6,500-word essay titled “The Future is for Everyone,” arguing that advanced AI should be handed to individuals rather than concentrated in a few institutions, and that “the notion AI is so dangerous that the only safe path is an extreme concentration of power seems inherently problematic.”
Meta also announced a $1 billion fund for communities hosting its data centers, a response to the local opposition that has become one of the larger obstacles to building AI infrastructure. The essay cites Richland Parish, Louisiana, where teachers received a $50,000 bonus out of the tax revenue Meta’s construction generated.
North American Aerospace Defense Command (NORAD) F-16 fighter jets intercepted two general aviation aircraft that flew into restricted airspace over Bedminster, New Jersey, on Aug. 9, the command said.
President Donald Trump was at his golf club in Bedminster for the weekend, arriving the evening of Aug. 7 and departing for Washington on Aug. 9, according to his public schedule. The club hosted the LIV Golf New York tournament from Aug. 6 to Aug. 9.
Both aircraft were escorted out of the area safely, according to a statement from the Continental U.S. NORAD Region at Tyndall Air Force Base in Florida, which runs the mission. NORAD said in a post on X that it had intercepted multiple aircraft, while First Air Force put the number at two.
The restrictions had been announced days earlier. On Aug. 6, NORAD said it would enforce multiple VIP temporary flight restriction areas over New Jersey established by the Federal Aviation Administration for the weekend.
Such restrictions close off a defined block of airspace for a set period and are published in advance through notices to airmen, which pilots are required to check before every flight. The FAA issues them for presidential movements and other events, and NORAD enforces them.
In the Aug. 6 announcement, the command said aircraft violating the restrictions would be met with whatever action was needed to gain compliance, and it urged pilots to avoid that outcome.
NORAD also said the public may see U.S. Army ground-based air defense equipment in the same region. Those systems operate under NORAD authorities and work alongside its aircraft as part of what it described as a layered defense network of radars, satellites, and fighter jets.
The command tied the posture to Operation Noble Eagle, the name it gives to all of its aerospace warning, control, and defense missions in North America. NORAD describes the operation as deterring, detecting, and defeating potential threats to U.S. and Canadian airspace around the clock.
NORAD used the opportunity to remind pilots that if they are intercepted, they should immediately tune to 121.5 or 243.0 and reverse course until given further instructions on one of those frequencies.
Most traders may be out on the beach soaking up the mid-summer sun, but the relentless market and geopolitical newsflow continues for another week.
Following Friday’s payrolls report, which was far more dovish than hawkish at face value, attention this week will be firmly on July US CPI (Wednesday), which could go a long way towards further tipping the balance for September FOMC pricing. Futures pricing fell by around 10 percentage points immediately after the release on Friday, leaving the implied probability at 44%. Then we get US PPI (Thursday), which is key for the components that feed directly into core PCE. Other US highlights include retail sales and the preliminary University of Michigan consumer sentiment survey (both Friday). Elsewhere, attention will focus on the RBA policy decision (tomorrow), the Norges Bank meeting and UK Q2 GDP report (Thursday), and inflation releases across Asia and Europe. Corporate earnings are quieter than in recent weeks but reports from Tencent, BYD, Cisco, Applied Materials and CoreWeave will still attract attention.
Before we go into the week ahead in more detail the situation in Iran remains finely balanced with Iran’s latest political and security moves suggesting that Tehran is trying to balance a tougher domestic posture with a continued search for a diplomatic off-ramp. The appointment of former Revolutionary Guard commander Mohsen Rezaee to head the Supreme National Security Council reinforces hard-line influence at the centre of decision-making, even as Iranian officials insist they are close to an agreement with Oman on a new shipping framework through the Strait of Hormuz. Foreign Minister Abbas Araghchi has described the talks as being in their final stages, but Tehran has stressed that any technical agreement on shipping routes would not by itself lead to a full reopening of the waterway. Reuters and other major outlets report that Iran continues to tie any lasting Hormuz arrangement to wider demands on the US, including sanctions relief, compensation for war damage and security guarantees. Oman has characterised the negotiations as constructive, while Washington has signalled a willingness to continue talks despite periodic tensions. Brent is up around +0.8% this morning but US and European equity futures are fairly flat.
This all follows last Friday’s US payrolls report certainly offering a mixed assessment of labor market conditions. Headline payrolls unexpectedly fell by -23k, private payroll growth slowed to just +30k, and the previous two months were revised down by a cumulative -103k. However, much of the weakness was concentrated in two sectors – leisure and hospitality (-40k) and local government education (-50k), while goods-producing employment and construction both posted their strongest gains in several months. At the same time, the unemployment rate declined to 4.1%, its lowest level since early 2025. DB economists view the report as consistent with a broadly stable labor market rather than a sharp deterioration, noting that demographic factors continue to weigh on participation.
The softer payrolls data has reduced the urgency for further Fed tightening in the near term, but with labor market slack only gradually increasing, it’s over to Wednesday’s US CPI.
On this big number, DB’s economists expect headline CPI to rise by +0.15% mom after June’s -0.42% decline, while core CPI is forecast at +0.26% mom following an unchanged reading in June. Lower gasoline prices should keep headline inflation softer than core, and if forecasts are realized both headline and core annual inflation rates would edge down by around one-tenth to 3.45% and 2.51% respectively. Markets will also be watching for evidence of payback from several unusual price moves in June, particularly across parts of core goods and services.
Attention will then turn to July PPI on Thursday. Economists expect headline producer prices to rise by +0.22% mom, with core PPI at +0.3% mom. Particular focus will fall on categories that feed into core PCE inflation, including healthcare services, airfares and portfolio management. DB strategist are currently tracking +0.22% in July and 3.3% YoY.
Friday’s US data will offer the first major read on Q3 activity. Economists expect retail sales to increase by +0.1% mom in July, a dip from the 0.2% increase in June, as lower fuel prices weigh on the headline figure relative to underlying spending measures. The preliminary University of Michigan consumer sentiment survey is expected to ease to 54.7 in August from 55.2 previously.
Fed speakers are relatively sparse, although comments from Cleveland Fed President Hammack and Richmond Fed President Barkin may attract attention following the inflation data.
Outside the US, there are a couple of G10 central banks in focus this week. The Reserve Bank of Australia announces its policy decision tomorrow, with our economists (and the market) expecting rates to remain unchanged at 4.35%. Norges Bank follows on Thursday with a 25% probability of a hike priced in.
In Europe, the key release will be the UK’s Q2 GDP report on Thursday. Our economists expect June GDP to contract by -0.1% mom, leaving quarterly growth at +0.4% qoq, although risks are seen as tilted to the downside. Elsewhere, Norway and Denmark both publish July CPI figures today.
On the corporate side, the earnings season is becoming less intensive, with 400 out of the S&P 500 having now reported, but several notable companies remain on the calendar.
In the US, investors will focus on results from Cisco, Applied Materials and CoreWeave, while in China attention will fall on Tencent and BYD.
Courtesy of DB, here is a day-by-day calendar of events
Monday August 10
Data: Japan June BoP current account balance, BoP trade balance, July bank lending, Economy Watchers survey, Denmark July CPI, Norway July CPI, Germany wholesale price index
Central banks: BoJ summary of opinions from the July MPM
Earnings: Ferguson Enterprises, Alcon, AST SpaceMobile, USA Rare Earth
Tuesday August 11
Data: US July NFIB small business optimism, existing home sales, Italy June trade balance
Central banks: RBA decision
Earnings: Lumentum, CoreWeave, Constellation Software, Venture Global, Super Micro Computer
Auctions: US 3-yr Notes ($58bn)
Wednesday August 12
Data: US July CPI, Japan July M2, M3, machine tool orders, Germany June current account balance, Canada June building permits
Earnings: Tencent, Cisco, Commonwealth Bank of Australia, Coherent, Nebius, Cerebras, Vestas
Auctions: US 10-yr Notes ($42bn)
Thursday August 13
Data: US July PPI, initial jobless claims, UK Q2 GDP, July RICS house price balance, EU industrial production, Japan July PPI
Central banks: Norges bank decision, Fed’s Hammack and Barkin speak
Data: US July retail sales, August University of Michigan survey, June business inventories, China Q2 BoP current account balance, Eurozone June trade balance, Canada June manufacturing sales
Earnings: BYD
* * *
Focusing on just the US, the key economic data releases this week are the CPI report on Wednesday and the retail sales report on Friday. There are a few speaking engagements with Fed officials this week, including events with Presidents Hammack and Barkin.
Monday, August 10
There are no major data releases scheduled.
03:00 PM Cleveland Fed President Beth Hammack (FOMC voter) speaks; Cleveland Fed President Beth Hammack will appear on Yahoo Finance. Moderated Q&A is expected. At the July FOMC meeting, President Hammack dissented from the Committee’s decision to hold the target range for the fed funds rate unchanged, preferring a 25bp hike. In her dissent statement on July 31, she said that “given the stability of the labor market, with the unemployment rate near my estimate of maximum employment, I view high inflation as the more pressing problem.” She added that a “higher federal funds rate would help restrain economic activity and reduce inflationary pressures” because she does “not see the current policy stance as appropriately restrictive.”
Tuesday, August 11
10:00 AM Existing home sales, July (GS -1.0%, consensus -0.9%, last -2.4%)
Wednesday, August 12
08:30 AM CPI (MoM), July (GS +0.05%, consensus +0.1%, last -0.4%); Core CPI (MoM), July (GS +0.19%, consensus +0.2%, last flat); CPI (YoY), July (GS +3.35%, consensus +3.4%, last +3.5%); Core CPI (YoY), July (GS +2.47%, consensus +2.5%, last +2.6%): We estimate a 0.19% increase in July core CPI (month-over-month SA), which would lower the year-over-year rate by 0.1pp to 2.5% on a rounded basis. We expect mixed autos inflation, reflecting a 0.5% increase in used car prices, a 0.1% increase in new car prices, and a 0.5% decline in the car insurance category. We forecast benign readings for the shelter categories—a 0.23% increase in the OER category and a 0.16% increase in the rent category—reflecting the continued slowdown in their underlying trends. We expect mixed travels services inflation (airfares: +2%, hotels: -1%), reflecting the signals from alternative price data. We expect slight upward pressure on the communications category from recently announced price increases for consumer electronics worth 1-2bp on core CPI inflation. We estimate a 0.05% rise in headline CPI—reflecting higher food prices (+0.2%) but lower energy prices (-2.0%)—which would lower the year-over-year rate to +3.35% from +3.53%. Our forecast is consistent with a 0.26% monthly increase in the core PCE price index in July. We expect a sharp increase in the portfolio management component—reflecting the increase in equity prices in Q2, which flow through to the component with a lag—to contribute to the larger increase in core PCE prices than the core CPI.
Thursday, August 13
08:15 AM Cleveland Fed President Beth Hammack (FOMC voter) speaks: Cleveland Fed President Beth Hammack will speak at the Dayton Area Chamber of Commerce’s Government Affairs Breakfast series in Kettering, Ohio. Moderated Q&A is expected.
08:30 AM PPI final demand, July (GS +0.4%, consensus +0.2%, last -0.3%); PPI ex-food and energy, July (GS +0.4%, consensus +0.3%, last +0.2%); PPI ex-food, energy, and trade, July (GS +0.4%, consensus +0.3%, last +0.1%)
08:30 AM Initial jobless claims, week ended August 8 (GS 200k, consensus 202k, last 199k): Continuing jobless claims, week ended August 1 (consensus 1,800k, last 1,801k)
08:40 AM Richmond Fed President Tom Barkin (FOMC non-voter) speaks: Richmond Fed President Tom Barkin will speak on the economic outlook and monetary policy at the Chamber of Commerce in Greenville, South Carolina. Speech text and audience Q&A are expected. On August 7, after the release of the July employment report, President Barkin noted that the employment data were “very consistent with how I’ve been seeing the labor market—which is it’s not loose, it’s not tight, it’s sort of in a weak balance.”
Friday, August 14
08:30 AM Retail sales, July (GS -0.1%, consensus +0.1%, last +0.2%); Retail sales ex-auto, July (GS flat, consensus +0.2%, last -0.2%); Retail sales ex-auto & gas, July (GS +0.2%, consensus +0.3%, last +0.4%); Core retail sales, July (GS +0.2%, consensus +0.3%, last +0.5%): We estimate nominal core retail sales increased 0.2% in July (ex-autos, gasoline, and building materials; month-over-month SA). Our forecast in part reflects a 0.2pp drag from payback for an early Amazon Prime Day, which is normally conducted in July but was held in June this year and likely boosted last month’s report. We estimate nominal headline retail sales declined 0.1%, reflecting lower gasoline prices and auto sales.
10:00 AM University of Michigan consumer sentiment, August preliminary (GS 55.0, consensus 54.6, last 55.2): University of Michigan 5-10-year inflation expectations, August preliminary (GS 3.3%, consensus 3.3%, last 3.3%)
7.4 Mega Quake Rocks Colombia, Widespread Damage Reported
A little more than six weeks after twin earthquakes devastated neighboring Venezuela, killing thousands, a magnitude-7.4 earthquake struck western Colombia on Monday morning, damaging buildings and injuring people near the epicenter in Chocó province.
Bloomberg reported that the quake was recorded at 7:34 a.m. local time near San José del Palmar. Chocó Governor Nubia Córdoba reported major structural damage in the provincial capital of Quibdó.
Footage posted on X shows widespread damage:
🇨🇴 TERREMOTO EN COLOMBIA 🇨🇴
Daños enormes en Pereira y varias ciudades del país tras potente terremoto de magnitud 7,4.
#SISMO. Tras el fuerte temblor de magnitud 6.6 con epicentro en San José del Palmar, Chocó, sacudió a varias regiones de Colombia, dejando a Manizales como una de las ciudades más afectadas, donde la cúpula de la Catedral Basílica Metropolitana colapsó tras el movimiento telúrico pic.twitter.com/5XDOW76y55
Pereira, Cali,Manizales , armenia y Chocó los lugares de mayor afectación por el terremoto en Colombia ( imágenes del aeropuerto de Pereira ) pic.twitter.com/z3soRkG2Bb
The quake comes just days after Trump-backed Colombian President Abelardo De La Espriella took power and declared war on Marxist FARC dissidents (read report).
By Bas van Geffen, senior macro strategist at Rabobank
Talks between Iran and Oman on the reopening of Hormuz are reportedly inching ahead, as Iran continues to give the US the silent treatment. Negotiators said that a deal to establish a safe shipping route was close, but Iran may now be exploring just how much it can extract from the US in return.
Last week, Iran had already said that any deal with Oman would be contingent on the US lifting its blockade of Iranian ports. On Friday, a US official told Reuters that the administration agreed to this. The US blockade would end once a deal is announced that “restores commercial shipping without impediments.”
But give them an inch and they’ll take a mile. Tehran added new demands over the weekend, saying that the Strait of Hormuz will not reopen unless the US meets “a number of requirements.” These demands largely seem to refer to the original memorandum of understanding. Iran’s additional demands include the US ending all hostilities and withdrawing its troops from the area. Iran also wants Washington to pay billions in war damages and lift sanctions on the country.
Or do the additional demands reflect division between Iranian camps, and varying levels of distrust of the US? The strait remains a key point of geopolitical leverage – at least until planned alternatives for oil exports are all fully operational.
Meanwhile, the US president appears to be divided on the war as well. The Wall Street Journal reported this weekend that Trump had been willing to walk away without any agreement on Iran’s nuclear programme, claiming victory if the strait reopens. However, Iran’s additional demands may have torpedoed that plan.
Netanyahu rejecting the Board of Peace plan for Gaza is a further complicating factor. The Israeli prime minister indicated that he will not withdraw troops until Hamas fully disarms.
So, yesterday, Trump told Axios that he was “low-keying it,” waiting for the economic damage to build: “We are only semi-negotiating. We are just watching Iran with its huge inflation and the fact they have no money.” Yet, the longer this persists, the more economic damage could build in the US and other parts of the world as well.
Energy markets started the week off cautiously after all this. Brent futures are marginally higher, but traders seem reluctant to take big positions given all this on-again, off-again news. Equity markets seem to have shrugged off the weekend news flow entirely, perhaps partly aided by US economic data.
Following Friday’s employment report, the case for a Fed hike is weakening, but it is certainly not yet done for. The headline payrolls number disappointed, with a -23,000 jobs print and a 37,000 downward revision to the June estimate. In contrast, unemployment declined from 4.2% to 4.1%, but the underlying data indicate that this was due to a big fall in labour supply that outpaced the decline in household employment.
Our US strategist noted earlier that employment growth has been slowing for several months, and Friday’s report confirmed that downside risks to the labor market have not disappeared entirely since the three insurance cuts last year. This could strengthen the argument of the Fed’s doves. Yet, the employment report also allows the hawks to argue that the labor market is mostly suffering from supply constraints, even if they are a little less confident in their case than before.
In short, the labor market data may have removed some urgency, reducing the odds of a September hike. However, incoming inflation data remain key.
The Federal Reserve’s legal mandate is clear. It must focus on stable prices and maximum employment. In the past five years, the Fed has failed on both. Inflation remains materially above the 2 percent target, reaching a decade-high 25% cumulative inflation in the 2021-2025 period, while restrictive monetary conditions have been limited to rate hikes, which weigh most heavily on the small and medium-sized firms that generate most of net employment growth.
This failure was not merely a matter of missing a forecast but a policy framework that became narrative-driven rather than data-dependent. The Fed spent much of 2025 moving between concerns about inflation from tariffs based on ideology and a growing admission of weakness in the labor market. However, it continued to treat interest rates as its overwhelmingly dominant instrument. That is a poor policy mix when the problem of persistent inflation was caused by excessive government spending. Kritzman, at MIT Sloan, concluded that “mathematically, the overwhelming driver of that burst of inflation in 2022 was federal spending, not the supply chain.” However, the Fed’s policy was directed at penalizing the private sector while incentivizing large government deficit spending.
The Fed defines price stability as inflation running at 2 percent, measured by the PCE price index. That goal was still unmet at the end of 2025. Headline PCE inflation rose 2.9 percent year over year in December, while core PCE inflation was 3.0 percent. Both headline and core inflation increased 0.4 percent in that month alone. This is not price stability. It is persistent erosion of household purchasing power. A family does not suffer the inflation target in a Federal Open Market Committee statement but significantly higher price increases than those reflected in CPI at the supermarket, the gas station, rent payment, and utility bills. The fact that inflation has slowed from its 2022 peak does not mean the inflation problem has gone away. Prices remain permanently higher after years of monetary and fiscal excess, and the cumulative loss of purchasing power remains embedded in household budgets.
The Fed’s narrative during 2025 frequently focused on temporary factors, inexistent tariff effects, labor-market rebalancing, and the expected path of core inflation. Some of those factors mattered. But the larger error was to ignore the monetary and fiscal origins of the inflation shock. Inflation did not appear suddenly. It was the consequence of an extraordinary expansion of money, liquidity, and deficit-financed spending in 2021 through 2024.
The United States ran enormous fiscal deficits even after the pandemic emergency had passed. Government spending grew aggressively, while the central bank’s earlier asset-purchase programs absorbed a large volume of government and mortgage debt. The result was a policy mix in which fiscal expansion was incentivized and monetary discipline was inexistent.
The Fed was not a brake on fiscal excess. It was an enabler.
Quantitative easing and the expansion of the central-bank balance sheet created the perception that all public deficits could be financed at artificially low cost without consequences. That illusion encouraged Yellen and Biden to treat debt issuance as painless and made it easier to sustain spending levels that exceeded the productive capacity of the economy. Yellen’s reckless decision to refinance most maturities with short-term bonds proves this. She was clearly expecting more easing in 2025 after the unnecessary rate cuts announced in the middle of the election campaign.
Money supply growth, deficit spending, and ultra-low policy rates were not small mistakes or isolated events created by an emergency. Together they created too much unproductive demand relative to available supply. When supply chains normalized and energy prices fell, some disinflation followed, but the excess monetary and fiscal impulse had already lifted the general price level and distorted the allocation of capital. Furthermore, the overall inflation continued to rise even when energy prices fell below 2022 levels and supply chain costs dropped to pre-COVID-era prices, proving that monetary and fiscal excess, not a supply shock, was the main cause.
The government’s and Fed’s responses made the error worse. Instead of controlling spending and understanding the fiscal source of persistent inflation, using the balance sheet more forcefully, the government increased public spending by 2 trillion above the emergency levels of the COVID-era, and the Fed placed the burden of restrictive policy on private sector borrowers. Families with credit cards, first-time homebuyers, small businesses, and entrepreneurs became the transmission mechanism of monetary policy.
Small firms are the backbone of the U.S. labor market. Businesses with fewer than 250 employees account for more than 51 percent of net job creation and generate 58 percent of net private-sector employment growth from the first quarter of 2023 through the end of 2025.
Small businesses do not finance investments like large listed corporations, issuing bonds, syndicated loans, or share issuances. Small businesses need bank credit, using variable-rate loans, personal guarantees, commercial-property lending, and retained earnings.
The Fed’s restrictive policy hits the productive economy hardest. A large company with a strong balance sheet can delay expansion. A small business with a refinancing need will stop hiring, cut inventories, postpone equipment purchases, or close altogether.
NFIB data shows that the average short-term loan rate paid by small-business borrowers was 8.4 percent in December 2025. Only 25 percent of owners reported borrowing regularly, a historically low share.
By keeping liquidity elevated, enabling government excess, and hiking rates, the Fed has made borrowing costs prohibitive and often nonexistent for small businesses (SMEs). For many banks it became safer and more profitable to hoard government debt than to lend to families and businesses.
SME credit constraints accelerate employment losses, accounting for roughly one-third of the aggregate employment response to monetary-policy shocks. Thus, the central bank cannot claim to support maximum employment while maintaining a framework that punishes the firms responsible for most of the job creation.
The Fed’s own institutional analysis recognized that policy remained contractionary even after rate reductions, with the federal funds rate above the neutral level. Therefore, monetary policy was still restrictive while inflation was not being driven by an overheated private economy.
There is no compelling case for maintaining a punitive rate stance when private-sector credit creation is weak, hiring is slowing, and the inflation impulse is increasingly concentrated in transitory categories such as energy or government-driven cost pressures. The correct question is not whether inflation is above target. It is what is causing it.
As inflation comes from excessive government spending, debt monetization, or a temporary energy shock that is fading, higher rates do nothing to solve the source of the problem. As such, it gives the impression of a restrictive, inflation-control-focused policy but it is very far from the stated intention. The Fed was exceedingly accommodative when it came to bloating the size of government in the economy and aggressively hawkish against the private productive sector. Therefore, rate hikes simply crushed investment and consumption in sectors that did not create the inflation.
This is the massive policy mistake at the heart of the Fed’s 2021-2025 approach. It tried to cure inflation through higher borrowing costs while leaving the balance-sheet channel underused and allowing fiscal dominance to remain unchallenged. The Fed was trying to cure obesity in the system by starving the part of the economy that was already thin.
Interest rates are a blunt instrument, similar to using a cannon to swat flies. They affect every borrower, but their damage is greatest for households and smaller firms. The balance sheet is a more direct tool for removing excess liquidity, reducing monetary distortions, and restoring discipline to governments and financial markets.
The Fed did reduce securities holdings by around $2.2 trillion from June 2022. However, in October 2025, it announced that securities runoff would cease from December 1, even though its balance sheet remained extraordinarily large by historical standards. That decision sent the wrong signal. It suggested that the Fed was more willing to preserve the sovereign debt bubble and manage short-term market corrections than to implement monetary normalization. The Fed’s balance sheet has never returned to normal. It simply declines for a short period of time, only to rise again.
The Fed should have accelerated the balance-sheet reduction in a transparent and predictable manner instead of delaying it, allowing Treasury and mortgage-backed securities to roll off more rapidly, thus reducing excess money in the system. Powell and the Fed should have made clear that monetary policy cannot serve as a permanent buyer of government debt. They did the opposite.
That framework would reduce excess liquidity without forcing the entire adjustment onto entrepreneurs and working families. Furthermore, it would also create pressure for greater fiscal discipline, because government borrowing would face a more realistic market price.
Kevin Warsh offers an opportunity for a needed change in focus and approach. He recognizes that the Fed has two major instruments, interest rates and the balance sheet, and that they do not affect the economy equally. Warsh has argued that balance-sheet policy disproportionately benefits holders of financial assets, while rate policy reaches broadly across the real economy. He has supported a smaller balance sheet alongside lower interest rates, rather than treating rate hikes as the automatic and only answer to every inflation concern. This would make price stability and maximum employment easier to achieve.
These Restaurant Chains Won The Social Media War For Gen Z’s Attention
Millennials and Generation Z spend a disproportionate amount of time on social media, swiping left, right, up, and down, making growth in interactions an increasingly important measure of brand relevance. For restaurant chains seeking to attract younger consumers, social media platforms have become critical advertising tools for building brand awareness and, ultimately, converting that attention into restaurant visits or online orders through viral campaigns.
In a review of which U.S. restaurant chains won over younger generations in the second-quarter social media wars, UBS equity research analyst Dennis Geiger, who specializes in the U.S. restaurant industry, said McDonald’s, Starbucks, and KFC dominated restaurant engagement on Instagram, while Wendy’s, Chipotle, and several casual-dining chains recorded some of the strongest growth.
The restaurant chains that won social media advertising wars in 2Q:
Social media trends indicate rising momentum for select QSRs & casual diners
Using UBS Evidence Lab’s Instagram (> Access dataset) and TikTok (> Access dataset) data, we assessed how brands performed on social media platforms in 2Q26. We analyzed followers, posts, and interactions to better understand brand visibility, sentiment, and consumer reactions to recent brand developments. We believe that brands with strong online communities and committed followers are better positioned to drive visit frequency and improve consumer interaction, supported by research indicating a correlation between views and traffic. Select QSR brands delivered strong Instagram interactions and likes growth y/y in 2Q26, including: Chipotle, McDonald’s, Starbucks and Wendy’s. Several casual dining brands also posted strong y/y TikTok follower growth, including LongHorn (+167%), Applebees (+103%), and Outback (75%), among the leaders.
Recent earnings commentary highlights benefit of effective social media
Social media is increasingly relevant for connecting with customers, building brand affinity and driving visits. Several restaurants highlighted effective social media strategy and contribution in recent earnings calls, including: CAKE, CMG SBUX, CBRL, CAVA, SHAK, SG, BROS, WING, & YUM, among others. Brands highlight social media as a lever to expand the reach at the top of the marketing funnel, stay culturally relevant (ie world cup, viral trends), engage directly with consumers, and maximize awareness for strategic initiatives (events, promotions, partnerships). Several brands have also gained significant attention from user-generated content and word-of-mouth across social media which might not be reflected in the brands’ own account metrics. In 2Q26, several brands had viral moments online including: 1) Cheesecake Factory’s Linda’s Chocolate Cake, Eggroll sampler, and Chicken Costoletta ‘menu hack’ went viral and contributed to strong sales results for the brand, w/ CAKE’s own social media content playing into these trends; 2) ‘My ___ Order’ video trend for Taco Bell (YUM), SBUX, CMG, WING, and WEN; 3) continued popularity of the Chili’s (EAT) Triple Dipper cheese pull trend; and 4) user- generated content for new menu items at Taco Bell, SG, & SHAK.
Instagram engagement increased y/y for select QSR brands in 2Q
Chipotle’s interaction growth (54%) likely reflects posts for the brand’s free entrees promo during the NBA Finals, ‘Wear a Soccer Jersey’ BOGO, Father’s Day, National Burrito Day, Chipotle Honey Chicken, and Jarritos partnership.
Wendy’s interaction growth (162%) is likely from posts for the return of the Sweet and Sour sauce, Minions & Monsters menu, Ice Spice Spicy Chicken Sandwich campaign, merch and rewards drops, the Cookie Dough Frosty Fusion, the Wendy’s look-alike contest, and the new Chief Tasting Officer.
McDonald’s interaction growth (45%) is likely from posts for KPop Demon Hunters collaboration, Stranger Things Tales from ’85 Happy Meal, new beverage lineup, Nike Book 2 shoe collaboration, and the world cup meal w/ collectible cup and happy meal (Squishmallows).
Starbucks’ interaction growth (43%) likely reflects posts for the new energy refresher lineup, Unicorn Frappuccino at Coachella, S’mores Frappuccino return, Devil Wears Prada 2 collaboration, new flavors (mango cream, tropical butterfly refresher, iced horchata, blue coconut), and world cup beverage sleeves.
Jack in the Box’s interaction growth (31%) is likely from posts for Smashed Jack Sliders & Hot Ones Munchie Meals, April fools, and collectible pins.
Wingstop’s interaction growth (25%) is likely from posts for April Fool’s, new Citrus Mojo flavor, Wrestlemania collab, Wingstop Hot Box, PopUp Bagels collab, Club Wingstop, and new chamoy sauce collab with Tajin.
Sweetgreen’s interaction growth (13%) is likely from posts for the wrap lineup, summer menu, chicken sesame crunch, and partnerships with influencers.
Instagram engagement increased across select casual-fine dining brands in 2Q
LongHorn’s interaction growth (26%) is likely from posts for the Steak Master Series, Father’s Day, and consistent food posts.
Applebee’s interaction growth (17%) is likely from posts for $15.99 all-you-can-eat deal, Busch Light Apple re-release (i.e. BApplebees), 2 for $25 deal, Father’s Day Dollarita deal, Poolio with Don Julio drink, and posts about Applebee’s | IHOP dual-brand locations.
Chili’s interaction growth (2%) is likely from posts for Margarita of the Month, Chili’s Food Court collab with Trisha Paytas, Spire Motor Sports collaboration, Triple Dipper, and skillet cookie + molten chocolate cake menu hack.
Cheddar’s interaction growth (170%) is likely from posts for NASCAR sponsorship and partnerships with influencers.
Other notable Instagram/TikTok takeaways from analysis (data inside):
The Instagram total interactions leaderboard includes MCD, KFC, SBUX, Burger King (QSR), Taco Bell (YUM), BROS, CMG.
The TikTok total followers leaderboard includes MCD, Burger King (QSR), KFC (YUM), DPZ, SBUX, Taco Bell (YUM), CMG, WING.
Brands with the most Instagram follower growth in 2Q include PLAY, BROS, CMG, Popeyes (QSR), and CAVA.
Brands with the most TikTok follower growth in 2Q include Cheddar’s (DRI), LongHorn (DRI), Applebee’s (DIN), Popeyes (QSR), and Outback (BLMN).
DPZ’s June interaction growth (89%) is from posts for a 50% off LTO, world cup videos showcasing DPZ menu items around the world, and the new slice sauce.
Outback Steakhouse’s June interaction growth (137%) is from posts for Father’s Day, Aussie JAWSsie drink w/ hammerhead shark, their Propa Good Steak, joint posts with influencers, world cup, and the Down Under Trio.
LongHorn’s 167% TikTok follower growth in 2Q could be attributed to strong interactions across the brand’s Steak Master Series posts and consistent food posts.
Applebee’s 103% 2Q26 TikTok follower growth can be attributed to strong interactions on posts for Busch Light Apple and value deals (incl. 2 for $25, all-you-can-eat for $15.99).
2Q26 Instagram interactions were down y/y for Olive Garden (-78%) and Cava (-63%) due to lapping of viral posts from 2Q25.
Instagram Analysis – 2Q26
The big takeaway is that one viral social media campaign can capture younger consumers’ attention and instantly translate online engagement into a surge in restaurant traffic and delivery orders.
Really seems like Olive Garden’s social media team needs a revamp.
A volunteer security initiative says it used frontier AI models to scan 150 Bitcoin repositories and found more than a dozen vulnerabilities as developers increasingly use artificial intelligence to audit blockchains.
In a post on X earlier this week, AnchorWatch CEO Rob Hamilton said the group has spent about $20,000 on AI services while building a “Bitcoin red team” platform.
“We have been working around the clock, with ~$20,000 of spend up to this point across different services,” he wrote.
“Funding is secured, I appreciate all the gestures for donations but it is not necessary. The bill is taken care of.”
A red team refers to cybersecurity professionals who test software from an attacker’s perspective, probing for vulnerabilities before they can be exploited.
“We also have been connected with OpenAI for some help so I could manage getting the Cyber Harness running as well,” he wrote.
“It’s a much more expensive scan, but well worth it for load-bearing portions of the Bitcoin ecosystem and has already yielded good results.”
Pseudonymous Bitcoin developer Calle said the initiative has built multiple AI-powered review systems targeting wallets, cryptographic libraries, infrastructure, and other Bitcoin projects.
“We’re averaging on the order of one critical exploit per hour per person,” Calle wrote on X.
“We’ve reported critical vulnerabilities to several projects in the last 12 hours. Thankfully, this is a very expensive exercise. We’re burning through $10,000 per day.”
According to Calle, in the first 29.8 hours of its operation, its team has found 4,962 potential issues across 390 projects.
As many as 720 of them are considered high- or critical-level issues.
So far, 21.4% of findings have been able to be reproduced.
The team did not disclose which projects were affected or provide details of the vulnerabilities.
The announcement comes as AI is playing a growing role in finding security flaws across the crypto industry.
Earlier this year, researchers using Anthropic’s Claude Opus 4.8 uncovered a four-year-old flaw in Zcash that could have allowed attackers to create unlimited counterfeit ZEC. In August, Coinkite said it believes attackers used AI to identify the Coldcard wallet vulnerability, while Bitcoin bridge Boltz suspended its swap service after saying attackers were using AI to identify vulnerabilities faster than its team could patch them.
Sensitive Information Keeps Going To ‘No Reply’ Emails, And One Man Gets It All
A couple of security researchers have discovered that one of the internet’s most boring conventions, the fake “no reply” email address, can accidentally become a massive pipeline for private information, according to Wired.
Wired writes that security researcher Cory Solovewicz owns the domains noreply.net and noreply.us. Instead of being digital dead ends, the domains have been flooded with emails that companies apparently assumed nobody would ever receive. Since late 2024, noreply.net alone has collected roughly 400,000 messages, including more than 28,000 with attachments.
And this isn’t ordinary spam. Solovewicz has received everything from government injury reports and repair orders to school account information and login credentials. In some cases, companies appear to be sending automated messages to addresses such as companyname@noreply.net under the assumption that the messages simply disappear.
“I created an accidental honeypot,” Solovewicz said. What began as a personal email experiment eventually turned into an effort to warn organizations that their own systems were leaking information. He has avoided publicly identifying the affected companies and has been contacting them about the problem.
Another researcher, Mike Sheward, stumbled onto essentially the same problem after spending about $15 on deleteduser.com. Within an hour, emails from three different organizations had already arrived. Since then, messages from at least 100 organizations have landed in domains he controls, including hotel reservations containing customers’ names, vacation approval requests, Zoom invitations from a UK government agency and even information about Viagra orders.
One particularly troubling example involved an AI company that monitors industrial workers in the Middle East. Sheward says its systems mistakenly sent him thousands of CCTV images. The obvious concern is that researchers aren’t the only people capable of buying these domains. Criminals, extortionists or foreign intelligence services could do exactly the same thing.
The two researchers have now purchased more than 30 domains in an effort to keep them away from malicious actors. Solovewicz also tested more than 7,000 potential placeholder domains and found 328 configured with catch-all inboxes, suggesting the problem could extend far beyond what they’ve already uncovered.
The frustrating part is that the problem is largely avoidable. Companies can use internal addresses or domains specifically designed not to resolve rather than assuming a random “noreply” or “deleted user” address goes nowhere.
As Solovewicz put it, companies need to stop assuming these domains are unmonitored: “You guys need to fix your systems.”
