Forward Guidance Fed Embraces "Run It Hot" For Powell's Final Months | Weekly Roundup
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Dec 11, 2025 The hosts dive into the Fed's pivot towards a 'run-it-hot' strategy, amidst fresh liquidity injections and evolving market dynamics. They discuss inflation psychology and its impact on long-term yields. Attention shifts to China’s export struggles and the implications for U.S. trade. The conversation also explores asset selection, favoring metals and Main Street over tech giants. Additionally, they highlight wealth inequality's social consequences and the youth's shift towards practical skills amid changing economic landscapes.
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Fed Starts Large Reserve Purchases
- The Fed launched $40bn/month Treasury bill purchases to fix a reserves crunch and calm markets.
- Tyler Neville warns this elevated pace likely continues into Powell's exit and then morphs into another policy form.
Powell's Pivot Exposes Fed Uncertainty
- Powell admitted no new information but still pivoted hawkish-to-dovish since October, exposing Fed indecision.
- Tyler Neville says that inconsistency signals policymakers lack conviction and will "run it hot" next year.
Position For A 'Run-It-Hot' Regime
- Own hard assets because policy will "run it hot" and favor inflationary outcomes.
- Tyler Neville recommends positioning for metals and Main Street cyclicals over concentrated tech exposure.