The Julia La Roche Show #223 Chris Whalen: If Trump Doesn't Attack The Fiscal Issue Head On, He Could Be Lame Duck | 2025 Outlook
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Jan 7, 2025 Chris Whalen, Chairman of Whalen Global Advisors and author of The Institutional Risk Analyst, shares insightful economic forecasts. He discusses the potential rise in long-term interest rates if Trump doesn’t tackle the federal deficit. Whalen warns of disruptive consequences if Fannie Mae and Freddie Mac exit conservatorship without proper legislation. He believes focusing on Treasury policy is crucial and predicts a possible downward adjustment for stocks despite an optimistic longer-term outlook if effective leadership emerges.
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2024 Economic Overview
- 2024 was a transitional year, marked by lingering cash from the Fed and rising interest rates.
- Inflation impacted consumer spending, particularly discretionary items and housing affordability.
Inflation and Market Stability
- Inflation persists due to central banks' reluctance to implement stricter measures.
- They prioritize market stability over controlling inflation, potentially impacting the cost of housing.
Fed Interventions
- The Fed's interventions in 2008 and 2020 highlight their focus on market stability.
- They bought securities to stabilize markets, resulting in excess liquidity and impacting mortgage rates.