Chris Whalen, chairman of Whalen Global Advisors and author of The Institutional Risk Analyst, joins Episode 223 of the Julia La Roche Show for his first outlook of 2025. Whalen explains why he believes long-term interest rates could rise unless Trump makes "real progress" on the federal deficit, warns a "kamikaze release" of Fannie Mae and Freddie Mac from conservatorship without legislation would be highly disruptive, and shares why focusing on Treasury policy rather than the Federal Reserve is "all that matters." He also discusses why stocks could be "ready for a downward adjustment" after outperforming in 2023-2024, and offers a surprisingly optimistic longer-term view if Washington can demonstrate "real leadership."

Links:

Twitter/X: https://twitter.com/rcwhalen

Website: https://www.rcwhalen.com/

The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/

Stanley Middleman book: https://www.amazon.com/Seeing-Around-Corners-Achieving-Business/dp/B0D5PTSJVC/

Timestamps:

00:00 Welcome back to Chris Whalen

01:12 2024 retrospective and consumer spending

02:42 Housing affordability and discretionary spending

04:49 Inflation outlook and Fed policy

06:31 Fed's focus on market stability over inflation

08:16 Fed rate cuts projection for 2025

10:52 Trump administration 2.0 outlook

11:42 Fannie Mae/Freddie Mac conservatorship discussion

13:21 Recession probability assessment

15:25 GSE release implications

19:45 Best approach to GSE reform

21:47 Federal deficit challenges

23:38 US debt situation and spending freeze

25:49 Treasury debt issuance strategy

27:42 Shifting narrative from Fed to Treasury

28:36 Market outlook for 2025

30:50 Closing thoughts on leadership and demographics

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