RiskReversal Pod Rate Cut Impacts: Corporate Bonds, Gold & Global Drama
Sep 17, 2025
Peter Boockvar, Chief Investment Officer at Bleakley Financial Group and editor of The Boock Report, joins to unravel the effects of the Federal Reserve's rate cuts. He discusses how these cuts influence stock, bond, and gold markets, alongside the intricate dynamics of the labor market and inflation. The conversation dives into global trade shifts, central bank actions, and the challenges facing the U.S. homebuilder market. Boockvar emphasizes the importance of economic data amid evolving market patterns and political influences.
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Why Markets Rally On Cuts
- Markets are rallying ahead of Fed cuts because investors are trained to buy on easing, not all because fundamentals improved.
- If cuts are driven by a weakening labor market, asset-price gains may be unwarranted and vulnerable.
Neutral Rate Misunderstood
- The Fed's neutral rate discussion must account for real rates and current inflation, not a simple nominal 3% target.
- With inflation ~3% and a 1% real long-term target, only a few cuts get nominal rates to neutral unless inflation decelerates further.
Bond Rally Reflects Slowing Growth
- The drop in nominal yields reflects growth concerns more than falling inflation, shown by stable inflation break-evens.
- That implies bond rallies are stagflationary responses and could reverse once the Fed actually cuts.