Michael Kao joins Wealthion’s Andrew Brill to warn that next week’s signaled Fed rate cut will likely have unforeseen consequences: a resurgence of inflation and market instability amidst what he calls a “Vodka Red Bull” bifurcated economy. In this insightful interview, the retired hedge fund manager and writer at Kaoboy Musings defies consensus by arguing that a short recession could benefit the economy in the long run and that the coming rate cut is risky while inflationary fiscal pressures and supply inelasticities in oil and housing remain a significant concern.

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Don’t miss our live coverage of the Fed with Maggie Lake! Next Wednesday, September 18.

Chapters:

1:03 - The “Vodka Red Bull” Economy

9:17 - Michael’s Concerns Over a Premature Fed Pivot

15:43 - Was the Fed Late in Raising Rates? Analyzing Fed Policy Errors

26:14 - The Impact of Fed Policy on Markets and Real Estate

28:51 - How Much Will The Fed Cut Rates Next Week?

37:02 - Inflation Outlook, Oil, Global Monetary Dynamics and the U.S. Dollar

49:46 - Investment Strategies in a Confusing Macro Environment

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Episode highlights

Beware the Bifurcation: Economic Resilience and Debt Dynamics

Navigating Dollar Dynamics: Avoiding Devaluation Pitfalls

Cut First, Adapt Faster