Federal Reserve

“In this way, you know, you could spend five hundred billion dollars buying a bunch of junk debt. I really don't see as a reasonably, you know, savvy participant in the markets how it actually helps anything. I think all it does is it saddles you and me and all…”

“We've now poured between the United States government and the Fed Almost 10 trillion dollars. We smeared it into the economy, and only three cents of every dollar has gone into people's pockets, and I think we're hoping that the other 97 cents somehow trickles…”

“It is a equity market that is buoyed by Fed dollars that is not mapping to the reality of what's happening on the ground.”

“If you ask me, you know, we get all excited about the election, we get all excited about stimulus and tax policy, but the biggest elephant in the room is the Fed and rates. That's the 80 to 90% factor in the market this year”

“Central bankers around the world have raised rates. The only place that hasn't gone up is Europe, ECB, and the United States, the Federal Reserve.”

“The Fed is now saying that they're projecting two to three rate increases next year. So let's call that 75 basis points. Multiply that by the close to 30 trillion of government debt that you're talking about, Jason. That's about a hundred and fifty billion a y…”

“So when they stopped doing that I think you can expect that, you know, interest rates are going to need to rise in order to make our debt attractive to, you know, to bond buyers.”

“They decided completely arbitrarily at one point to start buying certain corporate debt. So they own like Ford debt, GM debt, commercial that's called.”

“And so, I think there's actually like a much greater risk now of the economy going to recession this year because of the Fed's overreaction this week.”

“It's gonna be very hard for the Fed to engineer a soft landing here, where we don't trigger a recession in the process of stopping inflation.”

“From 1950 onwards today, every time the government has started to raise rates or the Federal Reserve has started to raise rates, the stock markets have actually rallied.”

“I think you're going to see the Federal Reserve and the ECB and the Bank of Canada and the Bank of Japan step in in a very coordinated way to provide liquidity to these markets.”

“So the process of quantitative tightening, which is the Fed's mechanism of removing liquidity, is going to start now to the tune of about ninety billion dollars a month. But to run off all the money that they printed will still take three years, right? So we h…”

“From 19 or from 2018 up until about Q four of last year, there was a .92 correlation between that and the S&P 500 going up.”

“They should have stopped the QE right then and there, and then gradually started raising rates instead of these violent moves that we've had this year that are plunging the economy into recession that have caused the stock market crash.”

“It pops the asset bubble, It vaporizes something like 14% of global wealth, and then simultaneously workers feel a lot poorer because their wages haven't kept up with inflation.”

“There's going to be two 50 point hikes, one in June and one in July, and then effectively a pause because then the Fed funds rate will be at around two percent, and everything from there will probably be path and data dependent.”

“However, the hyperventilation this week by Bill Ackman on Twitter, that the Fed needs to be doing radically more, that somehow we need to be raising rates to six, seven, eight percent in order to squash inflation, to me seems highly misdirected and totally out…”

“And if they had stopped QE there, then we wouldn't have had this asset bubble in the second half of last year.”

“Because if we had made smaller adjustments, Every day for a period of time, as these economic data indicated that we should be making them more quickly, we would not be in this problem.”

“And actually the administration has been trying to add mandates. They basically gave the Fed a mandate around climate change. They gave them a mandate around equity.”

“So you go back to last year, the Fed bought 54% of the government's debt, despite the fact That the economy was growing at like five percent GDP, that it was bouncing back really strongly from COVID, that you had the stock market at all time highs, and yet the…”

“We were kind of in a supply side recession, and now by raising rates to some crazy amount, the end of which we're still not sure about, may actually then trigger the demand destruction to have a demand side recession.”

“We are 100% going to solve this inflation problem. Why do I say that? Because Price levels are fully within the power of the Fed. They just have to raise interest rates high enough.”

“What popped the bubble was that interest rates went from four to six percent in, from 1999 to 2000. That's what popped the bubble.”

“And we're in a, we're in stagflation. The Fed has to keep raising interest rates at the same time that we have persistent high Chronic inflation.”

“So I think Saks you are right that we will be there. Because you can only bring rates up so high until you break things.”

“In this last FOMC meeting, the Fed raised their forecast for what the neutral interest rate would be from three and a half to 4.6%. So in two months, they raised their forecast by over a hundred basis points.”

“They're gonna get to four and a half very quickly. And then this, something's gonna break. Like all these guys are saying, I think they're right. And then the fed put comes back on the table and we'll have this, we'll have the UK, you know, the UK thing happen…”

“It's going to go by 75. It's probably going to go another 75. We're going to have rates by four to four 50 to five percent, probably within Q one.”

“Now things are a little bit better, but I still think the huge recession is to come next year because all the interest rate increases we've seen. So the fed is, you know, pedal to the metal on interest rate increases, just like they were pedal to the metal on …”

“Populous did not cause 10 trillion dollars of money printing. It was modern monetary theory. And the experts of the Fed who did that. It wasn't Populous who created the great financial crisis of 2008 that caused the Zerp, and we're still living with all the do…”

“My guess is that they'll be too slow to react to the recession. So we'll end up with a period of rates being higher than they should too long, and then they will correct. They'll drop rates, but that could be two years from now.”

“We're going to get to a point that's probably higher than what people expect. That's probably around five and a half. And we'll stay there longer than people want. That's probably through the middle part of 24.”

“If a federal agency comes in, if the Fed comes in and says, you know what, we are going to backstop all of these banks, and we are going to put five hundred billion dollars behind it, and we're going to guarantee that all these deposits are going to be made wh…”

“That looks like it's somewhere between a trillion and two trillion. So that's another amount of money we're going to have to, or the fed will have to backstop.”

“Which means that a five percent fed funds rate is insufficient. So we're going to need to see a print of five and a half, 5.75% And that's when you're going to have enough contraction, and then the fed can come back with liquidity.”

“They clearly reacted way too late to the inflation. We've talked about this before. We had that surprise inflation print in the summer of 2021, 5.1%. They said it was transitory. They didn't react until November. They continued QE for another six months, and t…”

“So I think this is certainly a political mistake for Powell to say that his objective here is to hurt the wages of the American people and to basically cause a recession.”

“The money is being sucked out of the system. Like the tide before a tsunami and the tsunami is going to be all the Failures and bankruptcies.”

“What you're seeing over the last few weeks, it's just more and more evidence that it could be a soft landing. That we may not have a recession and we might even get rate cuts next year.”

“I think this is the kind of thing that pressures them to move forward The point at which they start cutting and to start to let go of the release valve, just because there's just too much pressure in the system.”

“However, there is typically a big lag in the impact on the real economy of rate hikes, and I think you could still see these rate hikes take effect over the next several months, and you could see a real dip in the economy, potentially a recession, and that wou…”

“If inflation ticks back up, if there's another wave of it, In the next several months, and there will not be rate cuts next year, and that means if its rates are higher than anticipated, valuations come down.”

“So I think what happened this week is actually pretty important because I think the markets were really trying to force Jerome Powell to start the cutting cycle, and now they had to move the date at which they could expect cuts out by a year.”

“And I think that the fed here has dumped a bucket of cold water on the markets, basically saying, we're not bouncing back to capital abundance anytime soon. We're going to be in this environment of more capital scarcity.”

“I think what changed for the market was the feds rhetoric. And I think that they were holding on to this option that they were going to show up out of nowhere with another 25 or 50 basis point increase. And I think that that's fundamentally now off the table.”

“I think what it's kind of saying is inflation is very much in the rear view mirror. Rates are going to get cut by the middle part of the year. The economy looks like it's going to be a soft landing.”

“I think there will be a rate cut in Q-one, and I think this is the Biden bailout.”

“Without debating whether it happens in first quarter or second quarter, the more fundamental thing is if you look two years out, you probably see Rates around two and a half percent, and that's a 160 basis points from here.”

“It's very clear to me that there was a regional banking crisis underway, and the Fed stepping in, I think probably saved us from having a recession this year.”

“I think now what the setup is for 20, 24 is basically we will melt up. Up until the first cut, and then there'll probably be some real selling.”

“I do not think that the balance sheets of regional banks are healthy enough to survive without this continued liquidity from this program. So I think the feds can have to do something to either replace the program, extend the program.”

“Powell did say, finally, it looks pretty likely we're gonna get these three cuts, so we're gonna be down to four and a half to four, seven, five on Fed funds by the end of the year. It probably means that we'll get another 50 to 75 basis points through 20, 25,…”

“We're probably now on balance, fifty-fifty between a hike and a cut. And I think if you don't see this thing change in the next three months, you're going to see 75, 25 for a hike of at least 25 basis points.”

“So I think he's going to be more concerned about erring on the side of tamping down inflation than erring on the side of the economy not doing as well.”

“And so I kind of tend to be in this camp that we're going to see more than one rate cut.”

“He's not going to get reappointed.”

“So it's very unlikely that we get back to a two handle, you know, at least in this kind of era and as a result, you'll probably see the market kind of assume that we're going to be at a three percent kind of inflation level for quite some time.”

“And why will they cut probably all the way down to two or three percent by the end of 26? It's because we now need to stimulate the economy.”

“And we just had a ton of capital come into the industry because the Fed and the federal government airdropped 10 trillion dollars of liquidity onto the economy in reaction to COVID.”

“The Federal Reserve's balance sheet swelled during COVID from four trillion dollars to eight trillion dollars.”

“So in the US we have our own access to the FED. We have a license, a banking license in the US. So we don't need commercial banks to be successful.”

“The Fed's rate cut on September 18th. I think that in hindsight, it was too big.”

“Because ultimately, I think it is inevitable that the Federal Reserve in the United States is going to need to buy The debt. They're going to need to monetize the debt, which means printing money.”

“This is not the time to be cutting rates. And the market is saying we are expecting higher rates for longer.”

“I a hundred percent support the Fed's autonomy in monetary policy.”

“So it's almost as if the Fed is just going to get relegated to this like random organization. Like, yeah, they'll control reverse repo, but they just won't have any credibility.”

“So I think this, there's an over correction here that's happening, which I think is dangerous. And I think it's going to slow down the pace of cuts. Which I think will then create a lot of other pressure in the economy.”

“And the only way to keep those interest rates low will be for the Federal Reserve to try and step in and buy those bonds, which will devalue the dollar.”

“What happens if Powell rips in a hundred basis point cut right now? I'll tell you. So one part which is mathematical is the interest on the debt goes down. We save three hundred billion”

“Rates should not be where they are today. They should be 50 to a hundred basis points lower. Period. It's categorical.”

“If you inject a hundred basis point cut into the economy, this thing is going to go gangbusters, and Trump is going to look like an economic genius going into twenty-twenty-six.”

“The problem is, as a lot of economists have talked about, and as we've seen in the bond market, is that that could Really push up the long end of the curve, because if you suddenly start to flood the market with capital in the short term by dropping rates toda…”

“And it caused an asset bubble in twenty-twenty-one, it caused the nine percent inflation that we had the following year, and it caused the crash that we saw in twenty-twenty-two and 23.”

“They're going to cut 25, obviously, in September.”

“I think that the Fed is no different than any other appointee to a part of the government, which is that they are partisan.”

“Well, this isn't lawfare. This is the president pushing back on, I think, a Fed that's been overly political.”

“I think it's very reasonable to say that any sitting president should be allowed to remove a Fed governor if he believes it's not aligned with the wishes of the electorate and the voters and the plan that was voted in.”

“He'll cut for Biden. He'll cut for Yellen. He'll cut for Kamala. He will not cut for Trump.”

“I've got a bill to eliminate that right now and that bill's co-sponsored by Bernie Sanders.”

“We paid a hundred and eighty eight billion, the Fed did, in interest to banks not to loan money. Most of it went to five banks in New York, the big five, but 40% of it went to foreign banks.”

“I do think that the Fed, we've benefited for almost 250 years on having Fed independence. I think that it's important to have, allow the Fed to think long term.”

“I actually think you are going to get three to four rate cuts. I actually think you are going to see a reacceleration of GDP.”

“And no one told the Fed that you're not supposed to buy high, so. They paid a high, high price for bonds, low interest rates, and their arbitrage, the Fed's losing about a hundred billion dollars a year now.”

“And the fed constant probably kept or definitely kept QE going for too long. And, you know, I called the fed the engine of inequality. And someone said to me, would you believe that the fed is responsible for economic equality in the system. And I said, absolu…”

“The economy, the markets are biology. They're not math. They're not physics. They're nonlinearities. They're very complex systems. They're mutations in the system. And this idea that we can have this decimal point certainty is just absurd.”

“And then if they cut rates, and that's the thing, I need a new Fed chair who cuts rates, and if they cut rates... You'll see sixes.”

“And by June, I predict we will see more rate cuts. Possibly, 75 to a hundred basis points, and big tax refunds are coming in April, thanks to a bigger standard deduction and no tax on tips overtime and Social Security.”

“Having Kevin Warch coming on board means probably generally more quantitative tightening, probably generally a bit more of a prudent approach to monetary policy.”

“You could probably make a bet or an investment on the idea that Kevin Warsh will lead the Fed to a new digital, better data system, more streamlined, more frequent, better data.”

“I think that it's likely down the road.”

“I think we could see north of five and a half, six percent overnight rates.”

“The longer the Iran war goes on, the longer we're going to see an increase in pricing for energy, oil, and that gas, and fertilizer. Those trickle through the economy because it inflates the cost of everything on the energy side and food on the fertilizer side…”

“In some ways, NVIDIA is kind of becoming the central bank of AI. The Federal Reserve of AI. That is like a way to kind of conceptualize what they are doing. And in the same way, the federal reserve, like a lot of monetary policy, it works through private banks…”