Sam Cutler @search4yield3 and Michael Green @profplum99 join Harry on LiveSquawkโs Market Talk to analyze how escalating US-Iran tensions are driving volatility across global markets. The discussion focuses on sharp reactions in oil and equities following shifting ultimatums around the Strait of Hormuz, despite strong global reserves and underlying economic softness. They also examine whether central banks are misreading supply-driven shocks as persistent inflation, and what that could mean for Fed policy. The episode concludes with a look at rising recession risks and how potential leadership changes at the Federal Reserve could shape the path ahead.
Available on YouTube: https://t.co/b2WN9Bk2Mz
Spotify: https://t.co/Q5wQiu89jo
And Apple Podcasts: https://t.co/zU0WHfhFlT
Bad news is good news for equities... for now - Rates are clearly restrictive, lack of job creation is evidence. GDP tracking ~4% thanks AI boom - if growth is coming from productivity gains and no job creation, the economy needs to grow at an even faster rate. We have job cuts at highest levels since 2020 and hiring plans weakens since 2009. Stocks are expensive and the risk of buying at these levels is elevated.
@Gamma_Blast_ same man, I feel like they are focusing on Dec and thinking Oct is already done deal - maybe hot NFP with steady UR changes that - but im looking for dec to fade < 37bps
A little something to keep eyes on as some stress in funding are popping up - EFFR ticked up 1bp and there was some large size in FFU5 likely playing a potential to tick up to 4.10 - nothing major yet but something to watch in regards to Fed QT...
First chart is tri party GC - fed funds, second chart blue line is SOFR - Interest on reserve balances - when blue line goes up bank reserves as a % of GDP slip to insufficient levels = funding becomes more scarce and both IORB and SOFR trade higher than fed funds (exactly like repo crisis of 2018/2019) then the white line is fed funds - IORB. So when reserves are ample, they trade at a rate below fed funds (more cash to fund system)