RiskReversal Pod $22 Trillion and Counting: How US Tech Giants Just Beat China’s GDP
Sep 16, 2025
The hosts dive into the U.S. stock market hitting record highs and the potential for interest rate cuts. They analyze labor market trends and their influence on Federal Reserve policies. A fascinating debate arises over the suggestion to reduce corporate earnings report frequency from quarterly to biannual. The conversation shifts to the power of tech giants, whose market caps now meet or exceed China's GDP, revealing insights into market volatility and the critical role of AI in shaping future investments.
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Market Expects A Small Cut, Not A Shock
- Markets are pricing in a near-certain Fed rate cut but not a large 50 bps move.
- Liz Young-Thomas warns a 50 bps cut would be hard for Powell to explain given current bond-market signals.
Bond Market Doesn't Demand Big Cut
- The bond market signals a smaller cut than last September because the two-year yield is closer to the Fed funds upper bound.
- Liz argues bond yields are not "screaming" for more than a 25 bps move today.
Labor Market Drives Fed Focus
- The Fed cares most about the labor market and looks at multi-month averages and revisions.
- Liz notes unemployment at 4.3% is the cycle high but still below the Fed's June projection of 4.5% year-end.