Why the Fed *JUST* Rugged Us | Fed FOMC Breakdown.
Overall Thesis
Fed Chair Kevin Worsh's recent FOMC meeting signals a market-driven monetary policy approach with limited Fed intervention, suggesting the market has already priced in rate hikes and the Fed will rely on market mechanisms rather than balance sheet expansion.
Narratives
Kevin argues gold has topped now that Kevin Warsh (a non-money-printing, Austrian-leaning Fed pick) is running the Fed, and he believes gold could be entering a multi-year bear market. He frames this as tied to the Fed's reduced willingness to run the money printer.
Key Arguments
- Kevin Warsh and his task forces are not going to run the money printer
- Gold's rally was tied to expectations of money printing/dovish Fed policy which is now less likely
Predictions (1)
Kevin notes the QQQ/Nasdaq 100 rejected the 675-680 level and sold off after Warsh's comments, reflecting market discomfort with the Fed's lack of forward guidance. He is hopeful for a short-term bounce next week once earnings and Fed commentary are digested, while cautioning about medium-term risks from higher bond yields.
Key Arguments
- QQQ rejected 675 and 680 during Warsh's commentary and collapsed into the close
- Market sold off due to lack of Fed guidance, not necessarily due to hawkish action
- Higher borrowing costs from bond market repricing could eventually hurt smaller companies more than mega caps
Predictions (1)
Hedges & Caveats
- Creator acknowledges missing the live stream and providing a summary interpretation
- Analysis is based on interpretation of Fed principles (Goodhart's Law and Lucas Critique) rather than explicit policy statements
- Creator notes 63 months of inflation concerns, acknowledging legitimate market impatience