"The Pulse" -- #122 / Another Rate Cut

Recruiting Timeline:

Banking:

Where We’re At:

• SA 2027: Raine opened its SA 2027 app this week with a quick turnaround! The app is due October 17th. This is the first bank to open up its SA 2027 app! Ever wondered what the interview process looks like at Goldman Sachs, JPM, or Evercore? All details logged in our Premium Database: Database for investment banking, consulting and buyside roles | The Pulse 

• FT 2026: Barron Investment Group opened its app. 62 firms are actively recruiting for FT 2026. We will continue tracking FT 2026 through November  

• If you need some interview support or just need a place to vent, check out our Coaching Program: Coaching for banking, consulting, and buyside recruiting | The Pulse. 95%+ of those coached for the summer 2026 recruiting season received offers!

New SA 2027 Applications:

• Raine: Merchant bank (SA 2027)

New FT 2026 Applications:

• Barron International Group: Consumer Boutique M&A (FT 2026)

See below to gain access to our premium database, updated weekly, which houses the application processes for over 300+ banks/consulting/buyside firms! Gain an edge over everyone else by not having to spend countless hours tracking applications and deadlines.

Consulting:

Where We’re At:

• Relatively light week. Boutique firms will continue releasing applications into November and December.

SA 2026 released apps:

• Putnam - Associate Consultant Intern (SA 2026)

SA 2027 released apps:

• None

FT 2026 released apps:

• Alliance Consulting Group - Associate Consultant (FT 2026)

• FTI - Corporate Finance & Restructuring Consultant (FT 2026)

Buyside:

Where We’re At:

• SA 2027: Hood River and Gemspring Capital opened their apps this week. There are currently 5 buyside firms actively recruiting for SA 2027

New SA 2027 released apps:

• Hood River Capital Management: Small Cap L/S (SA 2027; Handshake ONLY)

• Gemspring Capital: MM PE (SA 2027; Handshake ONLY)

The database is updated weekly and contains 300+ Investment Banking and Consulting internships/full-time positions along with:

• Interview tips for specific companies

• Interview prep material

• Applications and deadlines linked so that you can apply with one click

• Insider information about the application process

• Professionals to network with

• Buyside deadlines, interview prep, and people to network with for the sweatiest of students

We send the updated dataset every week with the latest banking and consulting job postings. We released our 122nd update today.

Students we have been helping have already landed roles at Blackstone, Goldman, J.P. Morgan, Jefferies, Citi, and Solomon.

To get access to the database and the weekly updates, you make a one-time investment of $50 Credit Card / Debit Card: (ThePulsePrep 25% SALE—Stripe.com) that grants you annual access to the updated database (please reach out for additional payment options). If you don’t find our services helpful, we simply ask for feedback on an area we can improve upon and will refund your $50.

This is a small investment for a huge payout when you secure your dream offer!

Premium Database——>Database for banking, consulting and buyside roles | The Pulse 

Market Update: 

Why did the FED Cut Rates?

On September 17th, the FED initiated a 25bps rate cut to drop the federal funds rate from 425 - 450bps to 400 - 425bps. The primary basis of the cut was due to rising unemployment—4.3% as of August data (is this data even right lol?).

However, the FED has a dual-sided mandate. One side is keeping unemployment low and the other side is keeping inflation low. Inflation is not low.

The latest PCE reading clocked in at 2.7%. Sure, we have made big progress from 9% inflation in 2022, but we are much closer to 3% than the coveted 2% target rate.

To initiate a cut last year, the PCE was ~2.5% and unemployment was ~4.2%. In a world with sky high valuations and rising unemployment, the FED understood that the system is fragile and dependent on the wealth effect for positive sentiment. We wrote about the wealth effect here: "The Pulse" -- #92 / The Wealth Effect 

Instead of waiting for inflation to cool further, they preemptively cut rates to avoid any further deterioration in unemployment. This cut will only fuel the speculation engine as investors slowly pivot to riskier assets where they seek higher yields. A year ago today, I was clipping over 5% on my high yield savings account—now I’m lucky to see 4%.

This is a confusing world.

I think Marblegate phrased it best, the “ticker-tape” economy is becoming incredibly different from the “counter-top” economy. The best, most liquid securities continue to outperform while the rest of the world feels more of a squeeze in their day to day living. The FED is focused on the latter, which isn’t very visible to the naked eye.

Nowadays, the best way to get a view into the “real economy” is through the private markets or commercial banking. Many of these “real economy” businesses dependent on floating rate debt felt a huge punch from 500bps of rate hikes—some even teetering on the cusp of breaching interest coverage and profitability ratios.

I think the following story is overblown, but you can get a glimpse of this stress by looking at the rise in PIK interest utilization by private credit funds.

Not all PIK use is bad PIK and some funds intentionally use a greater % of PIK for more subordinated credit strategies or less mature businesses. Also, with greater competition in PC, more and more funds are offering PIK to win deals. Maybe low-teens, fully cash-pay, senior secured first lien credit was too good to be true?

Either way, PIK is rising and a portion of that increase is related to weaker borrower conditions in the “real economy.” Even though primary assets continue to rip, the FED cuts rates to prevent a break in the “real economy.”

Will the cuts keep coming? A year ago, we predicted that the Federal Funds rate would be 300 - 350bps by year end 2025. I think the upper bound of that range is totally achievable if we continue to see greater unemployment (U-rate > 4.5%)—the data may even get altered to fit Trump’s agenda to ensure that rates are cut. Any inflation concerns will just be blamed on “transitory” tariff-related adjustments.

The FED must keep cutting or stay neutral. Any hike is off the table because this would erode confidence in the stability of the American economy.

Disclosure: Nothing written here is financial advice or should be used for investment decisions.

EBITDA.

Arguably the most well-known and controversial acronym in finance.

First, what is EBITDA? EBITDA stands for ‘earnings before interest, taxes, depreciation, and amortization.’ EBITDA is often referenced as “a proxy for cash flow” and is not a GAAP defined measurement.

More or less, EBITDA is a rough measurement of a company’s operating performance. EBITDA is often used within various ratios such as EV(enterprise value)/EBITDA as a measure of a company’s comparative value, EBITDA/sales as a measure of profitability, and Debt/EBITDA as a measure of a company’s ability to repay debt.

How to calculate EBITDA:

1. Net Income + Tax Expense + Interest Expense + Depreciation Expense + Amortization Expense

2. Revenue - COGS - other operating expenses (make sure D&A is not included)

There are many different ways to calculate EBITDA, but the two methods referenced above are the most common

Why is EBITDA controversial? Some people, such as Warren Buffett, think EBITDA is a bunch of bullshit that excludes REAL cash outflows that impact a company’s profitability. For example, an industrials company with high, regular capex has a much different EBITDA vs. FCF profile because capex is not included within EBITDA. In the case of industrials, EBIT may be a better measurement to quickly assess the performance of a business.

Everyone loves talking about EBITDA. Make sure you know what it is and how it’s used. At the end of the day, EBITDA is just one step on the path to Free Cash Flow (FCF). FCF is the true holy grail of all non-GAAP measurements and is a hill investors will die on. We will be covering FCF in next week’s update.

Going Forward:

We Want to Meet Your Club

We want to partner with your club / organization to prepare your members for summer 2027 investment banking and consulting recruiting. In the past, we have partnered with clubs across UPenn, UMich, UVA, UCLA, and more.

Please shoot an email to [email protected] to set up a time to meet!

Please reach out to us with any questions about recruiting or if you’re interested in meeting the team! ([email protected])

We are happy to chat, review resumes, or help set up a coaching session.

Check us out on LinkedIn (The Pulse) and Instagram (ThePulse)

Proudly Produced,

The Pulse

“The Pulse” #122