Layoffs surge to highest level since 2020, 2009 before that

Layoff announcements surged in November, with 71,321 job cuts recorded, a 24% increase from last November, though a steep decline from October’s spike. Through November, U.S. employers have announced over 1.17 million cuts in 2025, raising total job losses to one of the highest levels in recent decades. Hiring activity remains weak, just under 500,000 planned hires year-to-date, down 35% from a year ago and the worst showing since 2010. On the other hand, weekly unemployment claims recently dipped to 191,000, the lowest since 2022, even as continuing claims hover near 1.94 million, reflecting a labor market that is being reshaped largely through slower hiring and elevated layoffs, rather than a sharp spike in job losses.

• Without official government data about the labor market due to the shutdown, we are forced to look at other available information
• Layoffs spiking to levels not seen since the pandemic, and before that, 2009, are in fact troubling
• It seems companies are reducing their workforces due to a combination of letting go of workers they overhired after the pandemic and efficiency gains via AI
• Job openings data (JOLTS) have fallen to 7.8 million, the lowest level since 2021, and down from 12.2 million in 2022
• Quits, or the number of people quitting their jobs, have come back to 2019 levels, consistent with the view that employees are not as confident in their prospects as they were in the post-pandemic period
• All this evidence increases the probability of an additional rate cut this coming week

Yields rise globally

Long-dated yields have pushed sharply higher across major developed markets over the past week. In the U.S., the 10-year climbed back above 4.1% while the 30-year moved toward 4.8%, reversing part of November’s bond rally. Germany saw a similar 10–15 bps move, with the Bund curve shifting higher as investors reassess the pace of ECB easing. Japan delivered the biggest surprise: the 10-year neared 2% and the 30-year rose to about 3.35%, a significant jump for a market traditionally anchored by BOJ policy. Across regions, investors are demanding more term premium in the face of sticky inflation expectations, heavy sovereign issuance, and fading confidence that 2026 will bring rapid monetary easing.

• We look at long-dated yields instead of the short-dated interest rates set by the Federal Reserve, because they are closer to the basis upon which consumer and corporate borrowing rates are set
• While the Fed and other Central Banks can control short-term rates, long-dated yields are set by the market
• Long dated yields rising is a function of investor demand for more interest for taking longer dated sovereign risk (also known as term premium)
• This is due to persistent inflation expectations and concern about fiscal spending
• Japan’s yields are the most telling, given they have risen to levels not seen since the global financial crisis
• Japan has been at the forefront of zero monetary policy since the 1990s and has even manipulated long yields lower via “yield control”
• The new PM, Sanae Takaichi, has signaled that she is focused on both fiscal discipline, whilst suggesting certain targeted stimulus measures for the population
• We may be witnessing the final phase of its zero-interest-rate policy experiment, which is a guide for the Western world, including the US

Trump hints at new Fed chair choice

President Trump escalated his commentary on monetary policy this week, saying he has already selected the person he would choose as the next Federal Reserve Chair. He reiterated his view that the current Fed has kept policy “too tight for too long,” arguing that high rates are hurting growth and worsening the fiscal outlook. While he did not name the candidate, Trump has indicated he wants someone more aligned with his preference for lower interest rates and a more growth-focused policy stance. The comments stirred market attention because Powell’s term ends in early 2026, meaning a new appointment could materially shift the Fed’s policy framework at a key moment for inflation and long-term yields.

• While Trump didn’t outright name the next Fed chair, market participants speculated it may be Kevin Hassett
• Kevin Hassett currently serves as the Director of the National Economic Council (NEC) and previously served as the Chair of the Council of Economic Advisors during Trump’s first term
• He is known to be highly aligned with the President and Treasury Secretary Bessent on fiscal and monetary policy
• It seems this administration is intent on blurring the line of independence between the Fed and the Executive Branch
• Treasury Secretary Bessent made comments this week suggesting that regional Fed governors need term limits
• While this would need Congressional approval, the administration could use political pressure to orchestrate changes, with the potential to reshape the relationship between the Fed and the Executive branch
• In the meantime, risk assets (stocks, crypto) rose, as markets anticipate a new Fed regime more willing to cut interest rates
• At the same time, yields rose, as markets anticipate potential for higher inflation expectations

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