Jan 11, 2025

I recently read about the increase in bond yields and the market pricing that seems to be consistent with traders and Fed officials correcting overly pessimistic bets on growth. The Federal Reserve had begun “recalibrating” short-term interest rates in September, which led to a lowering of the policy band. Despite this, the yield on the 10-year U.S. Treasury note has gone up by a full percentage point, which is unusual compared to most prior cutting cycles. There is talk of a “reverse conundrum” driving up bond yields, possibly explained by fears of severe policy errors and/or looming institutional breakdown. However, some experts believe that the interest rate pricing in mid-September was extremely odd, and the relative changes in rates over the past few months make much more sense when viewed from the perspective of the unusual starting position.

I also came across a report from the Senate Budget Committee that criticizes the private equity industry’s stewardship of hospital chains. The report highlighted how financial interests were prioritized over patient interests in certain hospital chains and how certain promises weren’t kept. This investigation was launched after revelations of misconduct at an Apollo-owned hospital, and it raises questions about the industry’s ownership of health-care providers and the need for new regulations. Additionally, there’s news of Constellation Energy nearing a $30 billion deal to acquire power producer Calpine, which would force a major messaging shift for Constellation, a nuclear power giant that touts “emissions-free” energy.

In the realm of venture capital deals, there have been significant fundings and acquisitions in various sectors, including biotech, financial automation tools for healthcare, and at-home trauma and PTSD care. The news also covers private equity deals, public offerings, liquidity events, and fundraising, with notable developments such as Ares Management raising $1.3 billion for its climate infrastructure fund and Vistria Group of Chicago raising $3 billion for its fifth flagship PE fund. Additionally, there have been personnel changes in the financial industry, with notable appointments and promotions at various firms.

Stay Well!