Скачать или смотреть Episode 002: The Fed fumbles, BoJ pauses, & "dollar gamma" awaits

Are markets caught in a false narrative that is subject to sharp reversal?

Mark and I covered a lot in this episode. We start with a quick recap of the Bank of Japan meeting Friday and the Federal Reserve meeting two days earlier. But we spend most of our time discussing a new piece by Mark, Dollar upside gamma: Systemic pressures, that mostly aligns with my long-standing views but raises both some critical differences and questions about the future.

0:00 Intro

1:18 The Bank of Japan pauses but October is live for another rate hike.

4:53 Mark calls 25 and done for the Fed; Marvin thinks it was a Train wreck, a clear policy error that raises the risks that they will further compound it with more cuts before being forced to reverse. Both of us agree the Fed doesn’t understand what “risk management” means and is no longer really an inflation-targeting central bank.

17:03 Mark defines and explains his “dollar gamma” thesis: the end of “monetary extremism,” rising geopolitical risks, and a “tech super cycle” are combining to create fundamental divergence between the US and others that contradicts the narrative of the “end of US exceptionalism” and sets the stage for a snapback on a significant risk event.

22:06 Where our views align on his thesis: a dollar reversal is coming based on fundamentals that counter the dominant market narrative and the trigger may be something innocuous..

33:10 But there are also areas where we differ: equities as an inflation hedge, the risks from a large balance sheet, the efficacy of Quantitative Easing and potential for adverse effects from Quantitative Tightening.

49:10 When Western central banks veered into “monetary extremism” and the lagged effects on yield curve shape that are now manifesting.

53:55 What will be the effects of the “Great reckoning” beyond the dollar and term premia?

58:40 Energy’s role in the realignment and sorting winners from losers.

61:17 “Western-centric” circles of Global bifurcation and value in asset prices and FX.

https://thematicmarkets.substack.com/...