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My friend Brent Donnelly and I have launched the new TMTF podcast. - The Fed may be ready to turn dovish, but what has the bond market already priced in? - How to think about arbitrage when trading - Sometimes Brent Crude is more Italian than I am Listen on your favorite podcast platform

Not sure who needs to hear this. But with the federal funds rate at 4.33% and the terminal rate at 3.1%, yields on long-term bonds aren't high, and spreads are quite limited. With the inflation risk premium rising, the yield curve could steepen even further.

As a result, the US is facing a $300 billion tax increase planned for 2025, with virtually no new fiscal injection this year to offset it. Perhaps investors should factor this into their future assessments?

In euro terms, the S&P 500 is down 4% this year.

US curve steepeners are very popular, but there are fees to hold them (negative carry and roll yields), and Bessant may hit you with quantitative retirement account (QRA) changes, stock buybacks, etc. I mean, is there a better expression for "fiscal dominance"?

Everyone is obsessed with the fiscal situation in the United States, but the shift from austerity to fiscal spending in Europe and Asia is equally important. Fiscal deficits are now a global phenomenon, and that’s the real news.

Over the past three years, the S&P 500 has underperformed gold by 13%. This includes S&P 500 dividends and the opportunity cost of holding gold instead of Treasuries (e.g. negative carry).

The “dollar has stopped falling” crowd often forgets that other fiat currencies are just a release valve for this trade. Precious metals, long-term yields, and cryptocurrencies are also key release valves for the “debase and keep going up” policy. This macro theme remains valid for now.

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