Monetary Matters with Jack Farley “The Dollar Gets Annihilated” | Julian Brigden & Jonny Matthews on Fiscal Dominance, Secular Bond Bear Market, and Outlook on Rates & Tariffs
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Jun 8, 2025 
Julian Brigden, co-founder of MI2 Partners, and Jonny Matthews, a veteran macro trader at SuperMacro, dive into global economic dynamics. They discuss the forces that are weakening sovereign bonds and the implications of fiscal policies on the U.S. dollar. The guests analyze how tariffs impact business investments and bond markets, along with the risks tied to foreign investments. They also touch on productivity growth, inflation trends in Europe, and shifts towards non-U.S. assets amidst rising insurance costs, offering insights for navigating a turbulent financial landscape.
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Trump Era Market Dynamics
- The shift between Trump's first and second terms changed market dynamics drastically for US stocks and bonds.
- Trump 1.0 boosted stocks and weakened bonds, while Trump 2.0 created uncertainty, hurting stocks and bonds differently.
Tariff Impact on Economy
- Tariffs create economic uncertainty that hampers business investment and hiring plans.
- A stable but moderate tariff baseline of around 16% price increase can be managed by the economy if uncertainty is reduced.
Rise of Fiscal Dominance
- Fiscal dominance makes it difficult for central banks to protect bond investors as governments run large deficits.
- Yield curves become unanchored, and bond markets turn dysfunctional globally, seen in US, UK, and Japan.