Samantha's RECORDED Live Trading Room - 2/11/25
With #LTR Notes - by Samantha, Rithika and Mikey
Samantha’s Live Trading Room Summary - 2/11/25
CPI Wed morning now that my 10Y bond call got rejected exactly at my price target and fell back into support. Now let’s see how they trend post-CPI.
Oil and yields got a bounce on Trump war vibes - as discussed live this morning, as tensions rise from hostage release, ceasefire, Iran threats & now foreign-aid for refugee trade. "U.S. could withhold aid from Jordan and Egypt if they refuse to accept Palestinians as part of his proposed plan for U.S. involvement in Gaza"
Let’s keep it simple: Bonds are falling on war vibes and bonds will rise on peace, because war is inflationary.
Powell said a whole lotta nothing new this morning:
Neutral rate is likely higher post Covid. NO KIDDING! Yes, inflation is sticky & not falling back to 2% anytime soon, short of a crisis. I began saying 3% was the new 2% about 3 years ago when NY Fed Lori Logan intonated the same.
No hurry to move rates given labor market is strong. He figures Trump fiscal & tariff policy impact will be restrictive to growth. NO KIDDING. The Trump 2.0 policy book will tighten financial conditions so Fed can sit back & watch.
QE is not in the cards until/unless US is back at zero-rate policy. NO KIDDING! This surprised some but not Geoffrey & me: QE during this inflationary back-drop would be horrific for the dollar.
If you really want to know what the Fed has done, check out Geoffrey’s post in his slack member channel that explains how David Malpass (former Bear Stearns macro head) details how the Fed has been subsidizing the Govt and the Stock Market at the cost of creating inflation. Malpass: “It’s literally a floating rate loan from the banks to the federal reserve so they can buy government bonds” Result: Suppression of yields while taking money from the economy endangers the dollar!
Let’s talk stocks…
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