Lead-Lag Live Data vs Reality: Jay Hatfield on Jobs Revisions, Fed Cuts, and Where Value Hides
Sep 4, 2025
Jay Hatfield, CEO of Infrastructure Capital, shares his expertise on the questionable accuracy of BLS jobs data and its impact on investment strategies. He discusses how bond markets are signaling potential Fed cuts and argues for focusing on small caps and REITs as we approach year-end. Hatfield also emphasizes the need for a modern approach to labor data and warns that tariffs may distract from more pressing Fed policy issues. Tune in for valuable insights on navigating a slowing economy and uncovering hidden investment opportunities.
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Earn Yield With Preferreds And High-Yield Bonds
- If you want income while awaiting clarity, consider preferreds and high-yield bonds that yield ~8–9%. Hatfield recommends PFFA and BNDS as ways to earn yield with limited downside while rates fall.
10-Year Tracks The Terminal Fed Rate
- The 10-year Treasury closely follows the market's view of the terminal Fed funds rate, trading with a roughly 100bp spread. Hatfield uses this relationship to forecast bond yields and expects the 10-year near 3.75% if terminal rates normalize.
Position For Small Caps As Rates Decline
- Consider adding small caps into portfolios as rates fall, especially value-oriented, low-leverage small caps. Hatfield warns to stay neutral-positive because small caps have higher beta and can be sold in broad market drops.