That 70s Show
September 24, 2026
Via our subject title, we offer a nod to the multi-year sitcom known as “That 70s show,” which began its run close to the turn of this 21st century. For its part, it lasted nearly eight seasons. A nice run by sitcom standards.
Interestingly, economically speaking, we the citizenry have been living through various aspects of the 1970s.
Rising prices across the board, which can be thought of as systemic price inflation, rising interest rates via the bond market, and rising gold prices along with various other metals pricing and energy prices along with commodity prices as a whole line up with the 1970s as a general storyline here in the 2020s.
Employing simplicity, we can say there is a broad swath of “bad stuff” rising in the broad economic landscape relative to the citizenry’s everyday life experience. Specifically, the bad stuff rising places more pressure on households and the consumers within the citizenry.
Importantly, this is not new in recent months but rather has been unfolding in earnest for the previous six-plus years. There have been reprieves here and there, but nothing substantive in terms of putting an end to the bad stuff from continuing an upward price trajectory.
This takes us back to that 70s show, and as our current decade has unfolded, it has lined up with the 70s in various price trends.
The CRB
The commodity research bureau has a long-standing price index for a broad basket of commodities. The CRB index includes both soft and hard commodities, which underlines the broad scope of its components.
These include commodities such as copper, aluminum, coffee, live cattle, sugar, gasoline, orange juice, cotton and nickel, to name some of the components.
Many of the CRB components act as core inputs to many industries throughout the economic system. With this, an escalating CRB index does not bode well for a reduction in general pricing pressures. A challenging pricing pressure backdrop does not bode well for a reduction in interest rate pressures emanating from the bond market.
Think thigh bone connected to the hip bone, economics style.
Below, let’s take a look at the CRB.
The above dates back to 1960 in order to offer a big-picture view. This is where, in one concise commodities chart, we can see that our current decade lines up behaviorally with that of the 1970s.
On the left side our blue arrow highlights the pricing escalation of the early 70s. Prior to that, the CRB had been dormant for over a decade. Our blue circle denotes the relative reprieve (not a decline) in upward pressure by the mid-1970s. Then we see a second launch occurred, leading to a continued escalation in broad commodity prices to round out the decade back then.
For their part, back then, collective bond market participants wanted no part of these pricing pressures. With this, they revolted by pushing interest rates higher and higher by insisting, via their market positioning, on higher interest rates to compensate for the price inflation pressure. They collectively became known as the “bond market vigilantes”.
In recent years we have been experiencing a 2.0 version of the 70s vigilantes within the bond market.
This showed up notably when the then chairman of the Fed, Jerome Powell, cut interest rates by 1% over several months. For their part, bond market participants went full-on polar opposite and raised interest rates by just over 1% in the same timeframe.
We shared a couple of editions, noting the behavior back in that period. It was a serious tell at the poker table of economics and market participants that the old-school vigilantes had awoken. The 2.0 version of the vigilantes called the Fed out.
As is always the case, you cannot fight the bond market and win. The bond market won, if you will, in that rates pressed upward just as they felt they should in light of the price inflation backdrop, regardless of the Fed’s assessment to the contrary.
That was the first real sign that the old-school bond vigilantes had awoken from a multi-decade slumber. They completely disagreed with the policy move and showed their disagreement via their market positioning, which resulted in higher rates.
Relative to this part of the economic and bond market storyline, this is another area that lines up and has us living in that 70’s show, current day, and in recent years.
Interestingly, as I am writing this edition, bond market participants are going full-on by pushing interest rates to yet another higher high. They are not happy and are showing their disdain accordingly.
Relative to the price inflation side of this bond market disdain, we can see to the right side of the above chart how the CRB broad commodity index continues to reflect that we are living in that 70s show.
To the right side of the chart we see an initial launch via our blue arrow in early 2020. Our blue circle then identifies the general reprieve (not a decline) in commodity price pressure in the mid-2020s. Then we see (and are living) a second launch, which is identifying continued escalation in broad commodity prices up to the current day.
The 2020s meet the 1970s.
We have placed a horizontal red line to denote the previous multi-decade high point for the CRB. With the current broad economic backdrop as it is, a touch of that line seems most likely. The question is, if the previous high point is attained, will it continue on and trend to all-time new highs from there?
If so, that will not be received well relative to our current version of the aforementioned bond market vigilantes.
Time will certainly tell her story on this, but with the monetary and fiscal policy backdrops, such as they are, not to mention general geopolitical policies from both the U.S. and other nation states around the globe, broad commodity prices escalating higher seems quite probable when quoted in X national currency, to include the U.S. dollar.
Collective bond market participants, the vigilantes 2.0, are offering with their forward-looking view that price pressures curtailing and turning over real soon are not in the cards. Hence, they are pushing rates higher.
With the CRB pressing higher current day, continued price pressures within the economic system can be expected to continue. With this, high interest rates, if not notably higher, are the probable result. We are indeed living in that 70s show.
I wish you well…
Ken Reinhart
Director, Market Research & Portfolio Analysis
Comments