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“I am basically in the camp that a nineteen seventies second inflation wave is effectively baked in the cake. Like, that's pretty how far I am in that direction. And the OBB, the tax incentives, the reheating the economy, run it hot is absolutely here, and I just think it's not gonna be the run it hot everyone wants for the Nasdaq and other risk asset prices.”

“In the modern world, what do interest rates really mean? Who is the big debtor now? It's the government sector. So if you raise interest rates, doesn't it mean that transfer payments from the government sector to the private sector increase, which is an income increase? And that is being more and more monetized by bill issuance. So this should be paradoxically, a stimulus to economies, not now, a contractory force.”

“Markets are all about refinancing debt. We've got a huge amount of debt to refinance. And that's why markets are often laboring because they need liquidity to do that, that transformation. The products in the heart of the financial system is that debt needs liquidity to be in order for it to be rolled over because the fact is that if you issue a five year debt, bond, it's gotta be renewed five years hence.”

“The narrative that you've been getting, from the media is that bonds have been selling off. No one likes bonds. Safe assets are dead, etcetera. I think it's a lot more subtle than that. If you've got a more uncertain world where you've got tightening liquidity and increasing systemic risks beginning to build, then investors will go to the safety of government bonds. And what the bond market is telling us right now is there's an increasing demand for safety.”

“You need to own them. You have to own the hard assets because at some point, the pain's gonna be enough where they're gonna step in, and that's when your golds and commodities of the world just take their next leg higher.”

“What the policy of the administration has been to do is to kinda reduce the Fed's footprint in markets. So they've been trying to shift from what I've called Fed QE in general terms to treasury QE, and the treasury QE is the black area. The black area is basically changes in the tenor of issuance in the markets. So in other words, rather than issuing long dated bonds, to institutions like pension funds, and insurance firms, what you're getting instead is the Fed is issuing bills.”

“Preserving capital during periods of uncertainty is often more important than trying to time short-term market moves.”

“Preserving capital during periods of uncertainty is often more important than trying to time short-term market moves.”

“I think the next risk here is an export restriction control or ban of some sort. This is gasoline prices. They're up massively, over up over 33% to start the year, in The US here, and they're still rising. And this is, let gasoline prices go to the moon as textbook for how to lose an election. What could he do? He could put a export restriction. That would send Brent rocketing.”

“This chart I put up is one that we often show, which is looking at how liquidity drives crypto. Crypto is a great barometer of liquidity in the system. It's the most liquidity sensitive of all assets, understandably in many cases. I do exactly the same thing for a basket of crypto, which is Bitcoin, Ethereum, and Solana. So it's 60% Bitcoin, 30% Ethereum, 10% Solana in that waiting.”

“We've got four ducks here, economy, bond markets, equity market sectors, and liquidity, and they all seem to be saying the same thing. You're getting stronger economies. Commodity markets are moving. You're getting bear flattenings in yield curves, and you're getting things like cyclical value stocks, resources, energy outperforming, and liquidity kinda going down. And that's what it central banks not tightening yet. Just wait till they do. Then there's a problem.”

“You've got money which is moving in financial markets, and you've got money that's moving in the real economy. And what we say at the top of that is that all money that is anywhere must be somewhere. So we can't really be in two places at once. If it's in the financial sector, it's not in the real economy. And if there is a surplus of money in financial markets, it will spill over into the real economy and drive an economic boom.”

“Are we in a late cycle boom where you see oil taking off like this? It's generally a sign that this is the end of the cycle, and oil and the rate of inflation change really breaks the back of everything. When I see this spread of Europe versus The US, I think to my brain, nineteen ninety eight Asian financial crisis where you left all the Asian economies, and you put your money right back into The US.”

“You guys know the dollar smile, which is basically the dollar strengthens in a really good time of The US economy and then a really bad time where it's a haven demand. What I actually think in a fiscal dominant world is more relevant today is the yield smile where if you look at the last few years, they're just managing to this low volatility, passive grind up of flows supporting the equity market, 10% a year. But if you go too hot, you get persistent inflation, persistent growth, and higher yields.”

“Bessent played a key role in breaking the pound. In 1992, Black Wednesday, he assisted George Soros in betting against the pound. They built a 10 billion dollar position against the pound. And now he's sitting in the exact opposite seat. Do you think about the irony of that where he's trying to control everything? He was 29 years old. He ran the London office. It identified the housing market economy were too weak to support high interest rates. And now he's sitting here in this exact same seat.”

“This was the first Fed meeting since 1992 with this many dissents. There was eight in support of no change and then four dissenting. And then even to complicate the matter further, three of them were dissents in terms of wanting to it was actually technically speaking, they said, this who supported maintaining the target range for the federal funds rate, but did not support inclusion of an easing bias in the statement at this time.”

“What can they do? Let it breach. And if that happens, the dollar strengthens and yields globally rise because if 160 goes, Japan yields rise, US yields rise. Okay. What happens if they defend it at 160? They weaken the yen and weaken the dollar. Nasdaq sell off. But weaker dollar is inflationary in The US in a time where we're already reaccelerating on Main Street and yields rise.”

“Powell's really throughout his whole tenure, he's been pretty steady. And I think this is a testament to how the Fed messaging and forward guidance, it's like software they figured out where they can kinda just tweak everything and the market prices it in. And then once the Fed meeting actually happens, it's not there's it's, like, inconsequential. It's a it's like sell the news every single time now.”

“The size of the federal debt, outstanding has grown by about five and a half times. So there's a big, big increase in federal debt, and these markets are huge now. And the capacity the dealer capacity in the market from the private sector, the dealer banks is probably down by about half. You've got a much, much bigger bond market, with, you know, a market capacity, which is arguably lower. So there's risks here for the bond market. And so you need the Federal Reserve to be there, I think, to supporting liquidity.”

“The liquidity cycle which dominates, market movements is basically inflecting lower. We think of four regimes or, if you like, four seasons. And we're in the season that we currently call speculation, which is a late one. Take that as the autumn, the autumnal season. And, it's, you know, it precedes what we call turbulence. And turbulence is, probably, as the name suggests, a very difficult time for risk assets.”

“So there's really no path to the Fed cutting in '26 without a crisis. You know, or according to when they make the date revamp the data to make it more accurate to to paint the picture they want. But I think that's the my biggest takeaway is just, you know, the the treasury has control monetary and fiscal policy.”

“One of the things that we've been pointing to, which was very much a contrarian view, back January 1, was that yield curves would basically begin to flatten by the middle of the year. And that was a very different view than the consensus, which was basically wedded to the idea that yield curves would steepen and probably steepen significantly because of inflation problems at the long end.”

“What's happening in the US Treasury market with buybacks? The simple regression of that data, it shows you that each 10 increase in the move index basically leads to, subsequently, a 28,000,000,000 increase in treasury buybacks. So there's a direct correlation. It seems as if the treasury is directly targeting the move index. It wants bond volatility low.”

“If you go back and you like the history of financial markets, you know, I used to work at Salomon Brothers. Salomon Brothers and Phillips Brothers, the commodity firm, merged in the late nineteen seventies. And the reason for that was the commodity cycle, which was then furious running furiously, and the bond cycle were completely countercyclical. So in other words, what ends the liquidity cycle is rising commodity prices. Late in the cycle, what destroys liquidity is basically commodity markets going up.”