Higher Bond Yields To Wreak Havoc In 2025 | Jonny Matthews
Episode publishedPodcast: Forward GuidanceForward Guidance
Transcript preview
Preview only
Scale is the blockchain that's truly built different. Forget gas fees and waiting. Scale offers a seamless web 3 experience of fast, fee free transactions. Whether it's gaming, AI, or next gen dApps, Scale is here to power your future. Explore more at scale.space/ecosystem and follow them on x at scale network. Global Stake is redefining staking with performance, security, and sustainability at its core. Global Stake's self owned, end to end bare metal infrastructure gives you unparalleled performance and risk management. Plus with SOC 2 type 2 and CCSS certifications, you get institutional gr
fine. Thanks. Thank you very much for, inviting me back on the show. It's a it's a real pleasure to be joining you again.
Yeah. Yeah. Likewise. Yeah. You're on the show about 4 months ago, and you made the call about no recession in pretty much anywhere in sight. So with that as the context, I'd love to just hear about how are you thinking about things as we head into this new year here, especially within the context of what occurred a few weeks ago with the the Fed meeting in in December and just contextualizing what felt like a surprisingly hawkish tilt towards there and how you're thinking about that within your global macro framework.
First of all, I you know, it needs to be pointed out that the no recession call was, nonconsensus at the time. It's now much more consensus. But at the time, we've had, I think, 3 consecutive week payroll prints. And, of course, the Fed the Fed cut, cut their, funds rate by 50 basis points at the time. But to me, it didn't seem like there was any reason for a recession. It takes a lot. It really takes a lot, and I've said this previously on the show. It takes a lot to put the US economy into a recession. You need either a pandemic, a global financial crisis, something along those lines. And in
Yeah. So there's a few different things we can jump off from there, but the first thing I wanna ask you about is, you know, to your point, back in August, there was a lot of talk about, you know, some rules being triggered and that sort of thing and this concern for the growth outlook that caused the Fed to to come and swing in and and cut 50 bps. And that was around the time where you're, you know, saying that, nope. You know, no signs of recession happening. Ever since that day, we've seen, you know, we've seen the 10 year yields rise by a 100 basis points. We've seen term premiums start to
There's 2 things. I think at the time, you know, it's very easy to take potshots at the Fed, say, you know, they're wrong. They've they've you know, they've cut too much and so on. But I think at the time, bearing in mind that the Fed funds rate was where it was, and they had put in place a lot of hiking. And now it seemed like and it still seems like the labor market is nowhere near as dynamic as it was. It seems sensible to to start easing policy, particularly with the rapid decline in inflation that we'd had. And so to cut by just if you you know, once you've decided you're gonna lose polic
feel like one of the key components that has led to this, you know, surprise has been the growth story, especially in the US. And you brought your, a chart deck here, and I'm just gonna share one that I found really fascinating, is just to contextualize this surprisingly resilient growth outlook that we've seen. So, you know, you you described how the Fed has hiked, you know, that looked 4 25 basis points super quickly, and we've seen growth remain robust. And I would just love for you to unpack this chart, the implications, and how that relates to
Keep exploring with a free account.
A free account preserves the short preview. Upgrade to Pro for the full transcript and episode chat.