Insights

On October 1st hosted by Sean Hagan and Grace Remington on Bitcoin Magazine, Darius explained why the pace of upcoming interest-rate hikes could reveal whether the Fed is deliberately allowing pressure to build in the Treasury market.

In our opinion, market-implied pricing suggests monetary policy remains deeply accommodative, with another two to four rate hikes required to return policy to neutral

However, New York Fed President and FOMC Vice Chair John Williams recently signaled that policymakers may be considering a slower pace of tightening. If the Fed throttles back while policy remains accommodative, it could indicate a willingness to tolerate additional Treasury-market pressure.

That pressure could ultimately provide the political cover needed for…

Yes. And that may be more bullish than it sounds.

The July PCE Report and revised Q2 GDP data confirmed that bubble risk remains as high. 

So, should investors be worried?

Not necessarily. A Productivity Boom perpetuating a Jobless Recovery in a Resilient U.S. Economy amid Paradigm C, or “Run It Hot,” represents one of the most bullish growth backdrops of all time. 

However, the backdrop could get even more bullish.

If Treasury Secretary Bessent’s recent efforts buy markets enough time for the Fed to eventually step in and suppress long-term interest rates, it could mark the “official” beginning of 42 Macro’s Paradigm D, or “Default via Debasement.”