Chris Whalen, chairman of Whalen Global Advisors and author of The Institutional Risk Analyst, joins Episode 223 of the Julia La Roche Show for his first outlook of 2025. Whalen explains why he believes long-term interest rates could rise unless Trump makes "real progress" on the federal deficit, warns a "kamikaze release" of Fannie Mae and Freddie Mac from conservatorship without legislation would be highly disruptive, and shares why focusing on Treasury policy rather than the Federal Reserve is "all that matters." He also discusses why stocks could be "ready for a downward adjustment" after outperforming in 2023-2024, and offers a surprisingly optimistic longer-term view if Washington can demonstrate "real leadership."
Links:
Twitter/X: https://twitter.com/rcwhalen
Website: https://www.rcwhalen.com/
The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/
Stanley Middleman book: https://www.amazon.com/Seeing-Around-Corners-Achieving-Business/dp/B0D5PTSJVC/
Timestamps:
00:00 Welcome back to Chris Whalen
01:12 2024 retrospective and consumer spending
02:42 Housing affordability and discretionary spending
04:49 Inflation outlook and Fed policy
06:31 Fed's focus on market stability over inflation
08:16 Fed rate cuts projection for 2025
10:52 Trump administration 2.0 outlook
11:42 Fannie Mae/Freddie Mac conservatorship discussion
13:21 Recession probability assessment
15:25 GSE release implications
19:45 Best approach to GSE reform
21:47 Federal deficit challenges
23:38 US debt situation and spending freeze
25:49 Treasury debt issuance strategy
27:42 Shifting narrative from Fed to Treasury
28:36 Market outlook for 2025
30:50 Closing thoughts on leadership and demographics
