The David Lin Report Banks Borrow Record $50 Billion From Fed, Expert Reveals What's Next | Michael Gayed
Nov 5, 2025
Michael Gayed, a portfolio manager at the Free Markets ETF and publisher of the Lead-Lag Report, delves into why banks are borrowing record amounts from the Fed, signaling potential market stress. He forecasts an imminent spike in market volatility due to excessive leverage and overconfidence. Despite these short-term risks, Gayed remains optimistic about long-term stock performance, highlighting the positive effects of deregulation. He also discusses the potential pitfalls of increasing liquidity and the implications of political events on market narratives.
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SRF Spike Signals Hidden Financial Stress
- Michael Gayed sees record SRF usage as a sign of stress under the surface in the banking system.
- He links regional bank weakness, private credit headlines, and government shutdowns as compounding pressures.
Imminent Volatility From Crowded Leverage
- Gayed warns of an imminent VIX spike driven by leverage and crowded positioning.
- He highlights overconfidence, leveraged ETFs, and high retail margin as catalysts for sharp volatility.
Monitor Leverage And Private Credit Risks
- Avoid assuming no macro catalyst is needed; watch leverage as the main crash precursor.
- Monitor private credit and leverage metrics because small triggers can cause outsized selloffs.