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🔥3 THINGS THAT CAN SEND CRYPTO HIGHER! As per Sri-Kumar, markets could be shaken if Fed Gov. Lisa Cook is fired and replaced with a rate-cutter, if PCE inflation tops 3.1%, or if the President stacks the Fed with loyalists. Any of these could lift yields—as well as crypto.🚀

34,973 görüntüleme • 11 ay önce •via X (Twitter)

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What If Warsh Cuts Rates Next Week? Markets are overwhelmingly expecting Kevin Warsh to keep rates unchanged at his first Fed meeting next week, with some traders even pricing in the possibility of higher rates later this year. But what if the consensus is wrong? In this Short video, Lawrence Lepard, "fix the money, fix the world" presents the contrarian case that Warsh could be far more dovish than investors expect. The argument starts with inflation. Warsh has suggested that traditional inflation measures may overstate current price pressures and that alternative metrics, such as Dallas Trimmed PCE, paint a much cooler picture. If inflation is closer to target than headline data suggests, the justification for maintaining restrictive policy becomes much weaker. Another key piece of the thesis is productivity. Warsh has repeatedly discussed the transformative impact of AI on economic output. If artificial intelligence drives a meaningful productivity boom, the economy could grow faster without generating the same inflationary pressures that normally accompany growth. That would give the Fed more room to lower rates without reigniting inflation. The discussion also highlights the possibility that recent inflation pressures are being driven by temporary factors, particularly energy prices and geopolitical tensions. If those pressures ease, inflation could fall naturally, strengthening the case for easier monetary policy. There is also a broader economic backdrop to consider. The administration has made economic growth, domestic manufacturing, and reindustrialization central priorities. Building factories, infrastructure, and supply chains requires capital, and high interest rates make those investments more difficult. Lower rates would provide the financial fuel needed to accelerate those goals. The most controversial part of the conversation is the suggestion that Warsh could deliver not just a rate cut, but potentially a larger-than-expected cut (50 bps) if he wants to quickly reset policy. While that remains a low-probability outcome, Lawrence Lepard, "fix the money, fix the world" argues that markets may be underestimating the possibility of a significant shift in direction. If that happens, stocks could respond very positively as lower rates improve liquidity, reduce financing costs, and support higher valuations. However, the bigger story may be in #bonds. Long-term Treasury investors could view aggressive easing as inflationary or fiscally irresponsible, pushing #yields sharply higher. In that scenario, equities celebrate the pivot while the bond market revolts. So, according to Lawrence Lepard, "fix the money, fix the world", Kevin Warsh may not follow the path investors currently expect. If he embraces alternative inflation measures, leans on the AI productivity story, and prioritizes growth, the market could be forced to rapidly reprice both interest-rate expectations and long-term bond yields. 🔽Get access to my notes with the key takeaways from this interview with Lawrence Lepard, "fix the money, fix the world" by visiting my Substack (link below) ⬇️

Thoughtful Money®

11,749 görüntüleme • 1 ay önce