Macro Hive Conversations With Bilal Hafeez

Mustafa Chowdhury on Fed Policy, US Industrial Policy and Housing Risks

Sep 1, 2023

Rates guru and research team member Mustafa Chowdhury discusses the Fed's need to raise rates, US fiscal and industrial policy, and understanding US housing. Also explored are the implications of the BOJ's monetary policy, financial challenges for Chinese developer Country Garden, and the impact of slower growth in China on the global economy. The podcast also includes book recommendations and immigrant stories.

44:57

Creator website

Episode guests

Mustafa Chowdhury

AI Summary

AI Chapters

Episode notes

Podcast summary created with Snipd AI

Quick takeaways

The Fed may still need to hike rates to account for potential increases in the neutral R-Star and maintain average inflation targeting.

US homeowners have exhibited resilience to higher mortgage rates, highlighting the strength of consumer spending and creating opportunities for trades between higher US yields and lower European yields.

Deep dives

The Fed's November hike and the shift in real policy rates

The podcast discusses the Federal Reserve's current view on the Fed cycle, with a focus on the expected November interest rate hike. The conversation also explores the concept of real policy rates and the shift towards targeting a range of CPI rather than a point target. The guest highlights the difficulties in inflation forecasting and emphasizes the need to consider average inflation targeting. Additionally, the conversation touches on the concept of the neutral R-Star and the debate around whether it has increased, potentially requiring the Fed to raise rates further.

Introduction

2min

Analyzing the Fed's Policy and Probability of a November Hike

22min

Bank of Japan's Monetary Policy, China's Export Prices, and Market Equilibrium

4min

Financial difficulties for Chinese developer Country Garden

6min

The Impact of Slower Growth in China on Global Economy

6min

Book Recommendations and Immigrant Stories

4min

Mustafa is a rates guru and member of the research team at Macro Hive. Before this, Mustafa was the Head of Rates, FX, and Derivatives at Voya Investments, where he helped manage $40 billion of assets. Prior to that, he was a Managing Director and Head of US Rates and MBS Strategy at Deutsche Bank. And in the 1990s, he was Co-head of Asset-Liability Management at Freddie Mac, where he was responsible for managing one of the world’s largest fixed income derivatives portfolios and trading desks. In this podcast we discuss w hy the Fed still needs to hike rates, the importance of US fiscal and industrial policy, understanding US housing, and much more.

https://macrohive.com/home-prime/

https://twitter.com/Macro_Hive

https://www.linkedin.com/company/macro-hive