December 1, 2025 Live Trading Room Market Recap & Trades - (Samantha and AI Briefing notes)
One More Month...
Macro In A Nutshell
December 10th Fed rate cut is priced in. Powell speaking tonight at Stanford won’t change that most likely given Fed communication on the economy is in the blackout period and expectations are 90%. Attention will turn to the Fed’s updated “dot plot” plan for 2026 rate outlook. Having said that, the risk is if Fed does not cut, and remember: it is currently a draw: 6 to 6. Never before has FOMC had a split decision into or at an FOMC meeting. Risk of sell-off rises as a result.
December 18th Bank of Japan announces their policy decision, with 76% expectations of a hike if Fed cuts. Japan has a Fed problem if they don’t as the interest rate differential would create rate volatility which would trigger currency volatility which would seep into equity volatility.
Trump is still flexing on Venezuela, Russia-Ukraine and new Fed Chair - with no decisions on any of them announced or formalized, but announcement of expected front-runner Hassett next week could trigger bullish animal spirits to front-run future Fed cuts.
Supreme Court decision on Trump’s tariffs could be announced before Christmas. This is also a risk of “buy the rumor of tariffs; sell the news of tariff refunds”.
Epstein Files get released this month, supposedly, but level of redaction is unknown. We simply must wait.
REPO stress is still present despite Treasury assistance and Fed QT ending today. Should USD spike higher, we will know there is funding stress; otherwise, it’s business as usual: stressed but not snapped.
Otherwise, we are waiting for a macro trigger to interrupt the bullish complacency, the expected “Run It Hot” Trump promise, and the “Cut A Lot” rate regime into rising unemployment. Basically my theme continues: RECESSION INTO ALL TIME HIGHS.