Forward Guidance
“We’re In Uncharted Territory” | Warren Pies on Treasury Issuance, Housing Market, Oil, And Recession Risk
Oct 30, 2023
Warren Pies from 3Fourteen Research shares his views on bond supply, housing market, oil, and recession risk. He discusses the mortgage buydowns and their impact on homebuilders, predicts a recession in Q2 2024, talks about the relationship between interest rates, oil prices, and economic activity, and explores US government deficits and uncertainty.
01:07:17
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Quick takeaways
- The housing market may start to decline when mortgage rates reach 8%.
- A recession in Q2 2024 is predicted based on the decline in residential construction payrolls.
Deep dives
Change in Asset Allocation and Macro View
The founder of 314 Research, Warren Pye, discusses his change in asset allocation and macro view. He mentions being overweight commodities and underweight bonds in the past and how those calls have aged well. However, he now believes that bonds are more fairly valued, especially with the 10-year yield at around 5 percent. He also discusses the performance of commodities, particularly oil, and how the Saudis' actions affected the market. Based on his analysis, he has shifted his position to being overweight bonds and underweight commodities, with a slight overweight cash position.
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