The Lagging Indicator Delusion
Voter sentiment is a ghost. It haunts the headlines but rarely dictates the tape. While the NBC News poll released this morning highlights a 52.9 reading on the LSEG/Ipsos Primary Consumer Sentiment Index, the market is looking at a completely different set of numbers. On November 02, 2025, the real story isn’t the frustration of the electorate over legacy trade policies; it is the 0.4 percent surge in core retail sales reported just days ago, even as headline figures remained flat due to a 1.6 percent collapse in auto sales. Investors who trade on ‘vibes’ are missing the Alpha. The disconnect between what voters say to pollsters and what they do with their credit cards is the widest we have seen in the post-pivot era.
Context matters. As of this weekend, the Federal Reserve has successfully navigated two consecutive 25-basis-point cuts in September and October, bringing the target range to 3.75 to 4.00 percent. Per the October 29 FOMC statement, the committee is finally acknowledging a ‘neutral value’ estimate that the market had already priced in by late summer. The 43-day government shutdown that plagued October has created a data vacuum, but the private sector is filling the gaps with hard spending metrics that contradict the narrative of a crumbling consumer.
The Bifurcated Retail Reality
Generic retail analysis is dead. In the current 2025 landscape, Amazon and Walmart represent two entirely different structural plays. Amazon is no longer just a store; it is a high-margin services engine where AWS and advertising now account for nearly 60 percent of total revenue. On the flip side, Walmart has weaponized its physical footprint to capture the ‘value-conscious’ demographic that pollsters claim is suffering. With over 7,400 active price rollbacks in place as of late October, Walmart is gaining market share from mid-tier players like Target, which continues to struggle with ‘softness’ in discretionary categories like home goods.
The technical mechanism here is the ‘Wealth Effect Disconnect.’ While the bottom 50 percent of earners are feeling the sting of 3.1 percent core CPI inflation, the top 20 percent are watching Bitcoin trade above $111,000 and the S&P 500 hit new all-time highs. This bifurcation explains why University of Michigan sentiment data is hovering at multi-year lows (55.0) while actual non-store retail spending jumped 1.8 percent in October. The ‘frustration’ cited in the NBC poll is real, but it is not stopping the high-end consumer from spending, nor is it stopping the low-end consumer from migrating to Walmart’s private-label ecosystem.
Key Economic Markers: 2024 vs. 2025
To understand why the market is ignoring the polls, we must look at the hard delta between the 2024 election environment and the current November 2025 reality.
| Metric | November 2024 | November 2025 (Current) | Trend Analysis |
|---|---|---|---|
| Fed Funds Rate | 4.75% – 5.00% | 3.75% – 4.00% | Expansionary Pivot |
| Headline CPI (YoY) | 2.4% | 3.0% | Sticky Energy/Rent |
| UofM Consumer Sentiment | 70.1 | 55.0 | Vibecession Deepening |
| Bitcoin Price | $68,000 | $111,400 | Asset Inflation Outpacing CPI |
| Retail Sales (Ex-Autos) | +0.1% | +0.4% | Resilient Discretionary |
The Neutral Rate and the Political Risk Premium
Markets are currently pricing in a ‘Political Risk Premium’ that has nothing to do with the specific candidate and everything to do with fiscal policy uncertainty. The October CPI report confirmed that inflation remains sticky at 3.0 percent, largely driven by a 7.2 percent jump in rent expectations and a 9.4 percent surge in medical care costs. This is the ‘Affordability Trap.’ Even as the Fed cuts rates to support a softening labor market (where the probability of finding a job fell to 46.8 percent in October), the cost of living remains historically elevated.
For the sophisticated investor, the Alpha lies in the yields. The national average for a 12-month CD has slipped to 1.64 percent, down from 1.84 percent a year ago. This is forcing capital out of ‘safe’ cash and into equities and alternative assets, regardless of voter dissatisfaction. The market isn’t voting for a person; it is voting for liquidity. The ongoing government shutdown, while disruptive to federal data collection, has paradoxically fueled a ‘risk-on’ sentiment in decentralized assets as trust in legacy institutions hit a 2025 low.
The ‘frustration’ with Trump or any other political figure is a secondary narrative. The primary narrative is the battle for margin. Companies that can pass on costs (Amazon) or provide extreme value (Walmart) are the only survivors in a 3 percent core inflation world. The rest of the retail sector is being hollowed out by the bifurcated consumer. If you are waiting for voter sentiment to turn positive before buying, you have already lost the trade. Sentiment will not recover until the lagging effects of the current 3.75 percent rate cycle filter through to the housing market, which remains in a ‘doldrums’ state with building materials down 0.9 percent this month.
The next major milestone for this cycle is the March 2026 FOMC dot plot. This will be the first clear indication of whether the Fed intends to push rates below the 3.5 percent mark or if the ‘sticky inflation’ of late 2025 has effectively set a permanent floor. Keep a close watch on the 10-year Treasury yield as we approach the year-end; any break above 4.5 percent will signal that the bond market has officially lost faith in the Fed’s ability to contain the current 3.1 percent core CPI ceiling.
