Forward Guidance

With the Fed set to hike interest rates yet again, Jack is lucky to speak to the ultimate Federal Reserve heavyweights: Nick Timiraos, chief economics corresopndent for The Wall Street Journal, and Joseph Wang, former senior trader for the New York Fed. Timiraos and Wang share what they will be watching for in the Powell presser on November 2nd, 2022, and discuss how resilient consumer balance sheets are making the Fed’s job even harder. Timiraos

Wang argues that Treasury buyback program would be effective in improving liquidity in U.S. government bonds, which is currently very weak, and Timiraos shares how he goes about picking a question to ask Fed Chair Jerome Powell.

Filmed on November 1, 2022, the first day of the meeting of the November Federal Open Market Committee. Stay tuned for an upcoming interview with Joseph Wang and Jim Bianco, which will be filmed after the Powell presser on November 2nd.

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Joseph Wang’s book, “Central Banking 101”: https://www.amazon.com/Central-Banking-101-Joseph-Wang/dp/0999136747

Nick Timiraos’ book, “Trillion Dollar Triage: How Jay Powell And The Fed Battled A President And A Pandemic – And Prevented Economic Disaster”: https://www.littlebrown.com/titles/nick-timiraos/trillion-dollar-triage/9780316272810/

Nick Timiraos’ article: “Fed Meeting to Focus on Interest Rates’ Coming Path”: https://www.wsj.com/articles/fed-meeting-to-focus-on-interest-rates-coming-path-11667295181

Nick Timiraos’ article: “Cash-Rich Consumers Could Mean Higher Interest Rates for Longer”: https://www.wsj.com/articles/cash-rich-consumers-could-mean-higher-interest-rates-for-longer-11667075614

Joseph’s Wang piece, “The Money Still Flows”: https://fedguy.com/the-money-still-flows/

Joseph Wang’s piece on Treasury Buybacks (“Quantitative Buybacks”): https://fedguy.com/quantitative-buybacks/

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Timestamps:

(00:00) Intro

(01:07) What To Look For In November FOMC Meeting

(11:06) The Consumer Balance Sheet Is Strong

(19:45) The Fed's Balance Sheet

(28:45 )Treasury Liquidity Is Very Weak"

(31:20) A Potential Treasury Buyback

(31:51) Will The Fed Adjust Its Inflation Target?

(46:37) Could The Fed Go From A 50 Basis Point Hike To A Halt In Hiking Rates?

(49:36) Asking A Question To Jerome Powell

(56:43 )Is The Drain on Banking Reserves Going To Force The Fed To Stop Reducing Its Balance Sheet?

Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

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On todays episode of Forward Guidance, Alfonso Peccatiello Founder & CEO of The Macro Compass joins the show for a discussion on the U.S bond market sell-off and it implications for broader markets, both domestically & internationally.

Weighing sentiment, risk/reward & economic signals, Alfonso assesses if the current sell-off is justified, or is the trend about to reverse and provide an attractive opportunity to go long bonds? To hear all this & much much more, you'll have to tune in!

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Sign up to The Macro Compass bond course & use the code "Macro20" for a 20% discount: https://www.themacrocompass.com/courses/#bond-market-course

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Timecodes:

(00:00) Introduction

(00:32) The Bond Market Sell-Off

(11:38) Testing Bond Market Sentiment

(21:16) What Could Go Wrong Being Long Bonds?

(27:37) Bond Market Term Premium

(35:05) The Best Risk/Reward Is Short Equities

(38:36) The Real Weakness Is In Europe

(46:28) The Dollar Wrecking Ball

(51:00) Understanding The Yield Curve: Bear Steepening

(54:58) Supply & Demand In The U.S Bond Market

(58:46) Bank Bond Buying & Interest Rate Hedging

(01:17:40) Bear Steepening During An Inverted Yield Curve

(01:23:16) Will Bonds Continue Selling Off Until Something Breaks?

(01:28:47) Are European Banks More Resilient Than U.S Banks, Or Not?

(01:35:00) The Macro Compass Bond Market Class & 20% Discount

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets

Danielle DiMartino Booth, CEO and chief strategist of QI Research, returns to Forward Guidance to share her findings on the problems brewing in commercial real estate, the collapse in money supply (M2) growth, and her updated views on the auto and housing markets.

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Today's show is sponsored by Public.com: Get a 5.1% yield when you open a government-backed Treasury Account by going to https://public.com/forwardguidance

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Follow Danielle DiMartino Booth https://twitter.com/DiMartinoBooth

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Timestamps:

(00:00) Intro

(04:33) "Deathly Silence" In Private Equity World

(16:13) "There Will Be A 'Mark-to-Market' Moment"

(19:31) Issues In Commercial Real Estate (CRE)

(21:47) Public ad

(22:50) Auto Loans Are In Distress

(30:36) The Residential Housing Market

(36:39) ill Inflation Fall?

(38:08) Fed Expects A Recession

(41:12) Money Growth Is Lowest Since Great Depression

(44:30) The Debt Ceiling

(51:09) The Bernanke Doctrine In Jeopardy? (QE whil rates are above zero)

(01:03:40) Quantitative Easing Is NOT Back, Says Danielle

(01:09:28) Closing Thoughts On Credit Crunch

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

In the spring of 2020, the idea that the world would see persistent inflation was laughed at. No one is laughing now.

Vincent Deluard, head of global macro at StoneX, is one of the few macro analysts who foresaw this inflationary spiral to its full extent. He returns to Forward Guidance to explain how in the next leg of this inflationary saga, corporate profits will plummet as unemployment remains low and inflation fails to return to normal levels. Deluard shares several trade ideas and argues that the bear market has only just begun.

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(00:00) Introduction

(04:41) Reflecting On Inflation Projections

(19:35) The Reverse Wealth Effect

(24:05) Attributing Inflation As The Cause of Asset Prices Deflating

(29:20) Looking at Economic Trends

(35:02) Bit.com Ad

(35:32) Companies Investors Should Take Caution

(40:10) Financing Equity via IPOs and Specs

(42:50) Disruptions Caused By Millennial Lifestyle Companies

(46:50) Zombie Companies

(48:45) The Big Tech Companies

(53:17) Outlook on Inflation Over the Next Year

(59:00) Yields and the Eurocurve

(1:05:40) The Financial System Driving Behaviors

(1:09:00) Inflation In Other Countries

(1:14:20) The Five Inflation Trades

(1:20:30) Japan And the BOJ

(1:24:23) Vincent's Psychological Advice for the Market

(1:30:04) The Grasshopper Analogy

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

Nick Glinsman, macro hedge fund manager and author at Intelligence Quarterly, joins Joseph Wang (“Fed Guy) and Jack Farley to explore whether the Federal Reserve is at all disturbed by the vicious sell-off in risk assets, or if the carnage in equities and credit is actually in service of its mandate to control stable prices.

Glinsman argues that the global economy is on the verge of a wage-price spiral for the first time in four decades, and the central bankers will be in no hurry to reverse course on their hawkish policy. Taking from his extensive experience working at some of the world’s most successful hedge funds, Glinsman warns viewers not to “slip on a banana skin” as they navigate the macro landscape. Joseph Wang’s message to the viewers banking on a “Powell Put” is even more stark: “wake the ____ up.”

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Nick Glinsman on Twitter https://twitter.com/nglinsman

Joseph Wang on Twitter https://twitter.com/FedGuy12

Jack Farley on Twitter https://twitter.com/JackFarley96

Blockworks on Twitter https://twitter.com/Blockworks_

Nick Glinsman's writings can be found at https://intelligencequarterly.com/.

Joseph Wang's writings can be found at https://fedguy.com/.

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Today’s episode is sponsored by Jack Farley, the host of Forward Guidance. If you would like to get in touch with Jack to potentially become a sponsor of Forward Guidance, you can email him at [email protected]. Serious inquiries only, please.

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(00:00) Introduction

(02:40) Banana Skins In This Market

(13:14) The Fall Of The "Transitory" Narrative

(23:30) The Wealth Effect in Reverse

(30:50) Ad

(36:07) Have Central Banks Lost Control?

(41:18) The Dollar and Bonds

(50:28) Bretton Woods III

(59:55) Inflationary Hikes

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.