Why Stocks Could Drop 10% Before Year-End: feat. Wellington Macro Strategist Mike Medeiros
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The first Fed rate hike since the summer of 2023 hit today, and we went LIVE from New York City to cover it. Minutes after Chairman Warsh wrapped his press conference, we brought on Wellington's macro strategist Mike Medeiros to make sense of the 25bp hike, the unanimous vote, and a statement that leaned unmistakably hawkish.
We asked Mike everything we've been dying to know: Was this hike a nod to the political pressure campaign coming from President Trump, or would cutting in this environment have been, in his words, "clinically insane"? Are Warsh and Treasury Secretary Bessent working together or against each other, with the Fed pushing financial conditions tighter while Treasury intervenes in the long end? How does Treasury actually fund those interventions next year — bills, buybacks, or the TGA — and does the debt ceiling take one of those off the table? We also dug into what the hike means for the coming wave of corporate issuance financing the AI buildout, whether the midterms change the policy calculus, where positioning is most offsides, his S&P target for year-end, and what the death of forward guidance means for volatility in the front end of the curve. Plus: what nickname does Trump give "No Cut Kevin" now?
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Everyone in the financial media is telling you the same story: Scott Bessent's surprise Treasury buyback announcement is a thumb on the scale of the bond market, and it's making Kevin Warsh's job at the Fed harder. But what if the headlines have it exactly backwards? What if the Treasury Secretary is actually running interference for the one thing the Fed Chair can't do himself? Fresh off asking Bessent this question face-to-face at the Charlotte Economic Club, Jen breaks down why she thinks there's a stealth rate hike hiding inside what looks like yield suppression, and why the best way to understand it is a three-act magic trick straight out of The Prestige.
The LA Lakers --- a prestigious basketball franchise that didn't change hands for 46 years --- just sold twice in ten months, the second time for $2.5 billion more than the first. The seller is Mark Walter, CEO of Guggenheim, owner of the Dodgers and part of Chelsea FC, and the man whose laptop and phone the FBI seized off his private jet just as the Lakers deal was coming together. Since then, one of the insurance companies in his orbit has revised its reported related-party investments from $1.4 billion to $17 billion. Quite the rounding error.