The Macro Trading Floor Is The Fed Ready To Capitulate Dovish?
38 snips
Aug 8, 2025 Alf and Brent dive into the weak labor market and how it may influence the Fed's next moves. They discuss the importance of market pricing when making macro trades, sometimes outweighing whether you're directionally correct. The shifting dynamics of currency, particularly around the yen and euro, are examined, alongside the risks of short selling in equities. They also tackle market volatility and the complexities of trading strategies, highlighting the unpredictable nature of current market conditions.
AI Snips
Chapters
Books
Transcript
Episode notes
Waller Isn't A Radical Regime Change
- Brent says Waller is dovish but remains inside the Fed’s orthodox, academic policy framework.
- He argues a true regime change would come from someone outside the inflation-targeting PhD cohort.
Fed Decisions Remain Data-Driven
- Brent stresses that Fed actions in 2026 will be conditional on incoming growth and inflation data, not personalities.
- He says policymaker shifts are marginal compared with the data’s directional power.
Tariffs Act As A Hidden Fiscal Tightener
- Alf describes a 'tariff mismatch' where tariffs act like a tax and bring $250–300bn of receipts into US coffers.
- That fiscal tightening can reduce nominal growth and push the Fed toward cuts if the slowdown materializes.
