The Market Has Moved from Deflation to Debasement | Warren Pies

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Jul 8, 2025

Warren Pies, strategist and co-founder of 3Fourteen Research, discusses the economy's shift from deflation to debasement, sharing his bullish outlook on equities while predicting Fed interest rate cuts. He emphasizes the importance of diversified investment strategies amidst rising costs and traces trends in foreign investment in U.S. Treasuries. The conversation also dives into how AI technology drives market momentum and explores core versus satellite investment strategies, advocating for a research-driven approach to navigate today’s economic landscape.

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INSIGHT

Shift to Debasement Mindset

Post-COVID, markets shifted from a debt deflation to a currency debasement mindset.
This change means investors focus more on preserving purchasing power than nominal principal.

INSIGHT

Bond Market Stability

The bond market is unlikely to face an imminent crisis despite fiscal profligacy fears.
Much volatility seen is noise as the market normalizes from overvalued long-term yields.

ADVICE

Use Fed Cuts to Judge Yields

Understand bond yields by aligning them with expected Fed cuts and economic data.
Adjust your fair value expectations for yields based on projected Fed policy and macroeconomic results.

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Warren Pies, strategist and co-founder at 3Fourteen Research joins Other People’s Money to discuss how the market and economy are transitioning from a deflation to a debasement mindset. He explains why he’s bullish equities, expecting continued disinflation despite his longer-term debasement view, and expecting the Fed to cut 3 times before the end of the year while the economy avoids recession. Pies also looks back on his launching his first year as an ETF fund manager.

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