저자: Kevin · 외국인
요약 보기
연준 윌리엄스 발언 이후 금리인상 기대가 낮아졌으나, 화자는 AI·에너지발 인플레이션은 금리로 통제 불가하며 금리인상은 시장 조작이라고 주장. 과거 90일간 시장이 높은 인상확률을 반영해왔다고 설명. 유동성 흡수(대규모 채권 발행)와 신용스프레드 확대를 우려하며 크레딧 리스크 가능성을 언급. 주가는 칩주 반등을 근거로 진입 기회를 제시.
다듬은 글
Well, this is starting to look a bit strange. The vice chairman of the Federal Reserve's rate committee has just stepped up again to help save the markets. We'll talk about what he said in a little bit , but I want you to pay attention to when he said it. So, this is the first time he made his comments here.
We were at 735 , and the Nasdaq was experiencing its 1st, 2nd, 3rd, 4th, 5th "red" day in a row. We bounced off line 735. People are nervous. And suddenly, what helps us reach historical highs? Oh, maybe we don't really need an interest rate hike in October. Actually, it was an article from September 29th.
The Fed's Williams hints that the next rate hike could wait. And remember, he's on the rates committee and he says the actions we took in September show a lack of urgency now. We can just wait. And it's like Bowman was saying yesterday or over the weekend, "Oh, you know, we can maybe raise the stakes quickly once and then just take it easy." "We could just do nothing for a while." This is exactly what Kevin Warsh usually doesn't want to do, which is to provide forward-looking guidance on what the Fed is thinking.
And here we are again. The market is back in the "red zone." And what is happening? Almost as if on command, a wizard appears. Ah, Mr. Williams, just appeared on the news feed. Let's start. Another interest rate hike is likely to be in order this year. Disinflationary forces are still at work. There is no broad pricing pressure outside of AI and energy.
Wow, that's something to argue with. There are no signs that the labor market is contributing to inflation. Well, that's true. We'll talk about that too. This is not the kind of economy that is overheating. AI is the inflation driver I track most closely, and it doesn't see a need for a rate hike in 2027 at this time.
Oh my God, okay. We have a lot to sort out there, but let's look at what's happening in the markets now. So, we are now betting on only a 23% probability of a rate hike in October. So we're now slightly raising the odds of a rate hike by the end of the year, from an 88, yes, about an 88.2% chance that we'll get a hike.
This is if you add both of these indicators here on the right. So, there is about an 88% chance that we will get a rate hike by the end of the year . However, remember that by September of the following year, the markets were actually betting quite high. In fact, there is a 2.7% chance that we will go all the way to 5.25.
That would be another 150 basis points, or six rate hikes. So that's six rate increases right here. Here are five. Five rate hikes have a combined probability of about 14%. Five more, right? Four additional rate increases have, say, 14 plus this, let's call it 15, a 40% probability. So you see what I mean .
Six, five, four, three additional rate increases. That's , uh, pretty high odds. In fact, the probability of three rate increases here would be a combination of what, 40 and 32 here, about a 72% probability that we get three additional rate increases. And so Waller says, you know, maybe we don't really need all these rate increases.
Maybe we just need one, and then it's like, "Oh, we did one, we missed a meeting , we did another, and that's it . We're done. It's okay. We've got it all figured out." Okay, what could be the reason for this? Several things could be causing this. One of them is the concern that the rate hike steps they are taking won't actually change anything.
This is what we talked about this morning and what I tweeted about yesterday. I said, " Listen, the Federal Reserve says they're raising rates because of AI and oil prices. But wait a minute. You can't control either of those, because they're both supply issues, and the Federal Reserve doesn't control supply issues.
There's nothing you can do. There's no amount of money, I mean, I guess it's out there , but raising rates by 25, 50, even 100 basis points is not going to stop Microsoft from investing in AI or Amazon or anyone else. It's just not going to do anything . What it's going to do is kill jobs and the labor market, which is actually very dependent on AI.
So, uh, the labor market is a little weak; and you know, the weekly numbers are looking pretty good. But when we actually look at the labor market, what we see is that it's mostly construction and jobs that are benefiting from AI, while people losing jobs—that's the ones who lose out to AI are call center workers, and that's clearly happening all over the world.
But what's remarkable is that it's showing a weakening, and that's another thing the Federal Reserve can't control. So he's right when he says that inflation doesn't come from the labor market. I believe that. But this idea that, 'oh yeah, if we raise rates, we're somehow going to slow down the data center buildout.'" No, don't slow down.
And you definitely won't print more barrels of oil at the Federal Reserve. So the whole idea of raising rates is just market manipulation, and that's what I tweeted about yesterday: it's just an attempt to manipulate inflation expectations, proving that Warsh has the pants to wear if needed. He can walk around in short shorts and not raise the stakes, but if he needs to put on pants and raise the stakes, he'll happily do so.
And if you look at the five-year inflation breakeven rates, they raised them to about here. This was when they raised the stakes and the markets were like, "Oh my God, does this guy really have pants?" Will he do it? Will he do it? Right after he raised the rate, the five-year inflation breakeven rate went down, and it, you know, remains relatively stable.
This has been going on for the last 12 months or so . So it doesn't seem like our expectations are getting out of control. Their job is almost done, and this idea of " Hey, maybe one more time, that's it." In my opinion, it is a little more indicative, because it indicates a greater sensitivity of the market, which makes people nervous for a different reason.
I think there is a massive " sucking up" of liquidity. We know this. Everyone wants to raise a lot of capital. This applies to SpaceX with their $40 billion , Broadcom with OpenAI, Broadcom with Anthropic, Oracle. And as a result, spreads widen, which is a sign of credit risk. We will talk about this in a separate topic.
But you have a large volume of securities issuance , and they are also of high quality. And people say, “Hey, man, if I can make 8% by buying SpaceX bonds, why would I take the risk with stocks? » At least that's how pension funds or perhaps life insurance companies see it. So there is real competition for the opportunity to earn a sufficient income, which they believe is safe and, as they say, as reasonable as possible for the expected profitability.
And the risk premium we get from investing in stocks is too small to justify giving up the 8% I could get from bonds, let's say . Now, if I look at the 10-2 spread, we touched on that this morning. He's falling, but he was falling even before Williams' performance. I thought it was because the 10-year bond was starting to signal, " Okay, maybe we'll actually make a deal with Iran, or some of these long-term inflationary effects are starting to fade," which is good, while the 2-year is staying stable.
So far, this spread remains at around 42 basis points, which is good. Whether we have a deal with Iran or something else, it's worth noting that they mentioned...Well, Williams is suggesting here that inflation doesn't look like broad-based inflationary pressures. Well , I somewhat disagree with that.
Because right now, and it's a little hard to just put into words, so I'm going to try to visualize it really quickly. Here's how it works. If you take the consumer price index right now and put it all on the table. I did this on an American Airlines flight yesterday. You know, these are the things that keep me going.
I thought, "Okay, why do n't we put all of this together in one filtered category so there's no headlines and stuff like that in the CPI?" And then let's sort them from highest to lowest, find where the 3% mark is, and take everything that's above 50%. Let's count them all to get X. And then we divide that by the total number, so X divided by the total number, right, T.
It was about 186, something like that, divided by, I would say, 348 positions. This amounted to 54%. In 54% of CPI categories, annual inflation exceeded 3 %. The reason I checked this out is because it's exactly what Kevin Warsh always refers to. And so I thought, "Hmm, well, I guess I should look at the data he's talking about, because he's mentioned it two or three times in press conferences." So I decided, "Let me see how I can calculate this myself." I did it and thought, "Well, not ideal." So, this is what we will obviously be paying attention to in tomorrow's CPI report.
We will do this calculation again. You can join me. I'll probably be live on the channel at 5:30 in the morning. Ah, good old early mornings. It's okay . We usually get up early at this time for course participants anyway. Well , I wonder why they suddenly had to act so aggressively? Maybe something is starting to break?
It's quite possible. JP Morgan believes that there are many more defaults on private loans . CoreWeave's performance doesn't look good. SpaceX bonds have fallen in price. There is a lot of concern that the credit market may not be ready yet, it is not mature enough, or there are cracks in it , or something is going wrong.
And if for some reason AI spending goes down , then it will hit the entire economy very hard, and you won't have to worry about wage inflation anymore. You will think about how to save jobs in general. But in any case, Williams went on to say that the reason for the September rate hike was, and I quote, “ risk management .” And he strongly supported the September rate hike.
Now he says that the path of rate changes in the future will be more focused on maintaining a balanced economy, which is quite interesting. This idea that, they say, we're just going to act cautiously. There is no need to rush to combat inflation. That's roughly the comment we received from the Federal Reserve today.
And it's a little strange because, you know, these comments just came out now. You see where this huge candle is on the chart. So you obviously got a little boost for the stock market. You're not going down to that 735 level at all. You're supported by these comments that markets may be pricing in future rate hikes too aggressively.
As a result, there is now some recovery in chip manufacturers' shares. Look at this bounce off the 355 mark for Broadcom. I think this is actually a great moment to enter. And here, look, Nvidia bounced back from 227— just fantastic. So, there are a lot of concerns, but the Fed seems to be looking to support this market right now.
So whatever they see there is enough to send out the vice chairman of the betting committee to say, "Hey, guys and gals, maybe we should start forecasting a little slower approach to the aggressiveness that the market is setting." In any case, we will talk about this in more detail just remember, you can always join by going to reinvestone.com. Thank you very much for watchi.
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