Julian Brigden, co-founder of MI2 Partners, joins Forward Guidance to share his outlook for the challenges facing the Federal Reserve. Brigden argues that nominal economic growth in the U.S. remains too high, and that inflation is at risk of re-accelerating after its steady fall over the past year.
Brigden expects that the rally in the U.S. stock market is fueling economic growth and in particular is preventing the increase in unemployment that normally accompanies the Fed’s interest rate hikes. As such, Brigden argues that markets are perched on a “knife’s edge” and that either stocks must halt their advance and start to decline, or bond must sell off drastically and the Federal Reserve must continue to hike interest rates.
Filmed on July 26, 2023, shortly after Fed Chair Jay Powell’s press conference at the close of the meeting of the Fed’s Federal Open Market Committee (FOMC). Brigden is also co-host of “Insider Talks” on Real Vision Pro.
Today’s interview is sponsored by Blockfills, a crypto trading solutions and financial technology firm. To begin your onboarding process, visit https://blockfills.com/open
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Timecodes:
(00:00) Introduction
(00:30) Something Has To Crack
(11:01) Hyperfinancialization Means Employment Will Stay High As Long As Stocks Keep Going Up
(22:09) Recession Risk
(26:41) What's More Likely, A Fall in Stocks Or A Fall In Bonds?
(32:34) Commercial Real Estate (CRE) Comparison To Subprime Mortgages In 2007
(36:17) Is The Bond Market Still The "Smart Money"?
(40:30) Is Liquidity Rising Or Falling?
(43:26) Inverted Yield Curves Predict Recessions... Right? (Maybe No Longer!)
(45:40) U.S. Housing Market
(49:32) Julian's Bear Case For The U.S. Dollar
(01:06:47) German Economy Is Very Sluggish
(01:08:34) China
(01:14:41) Will Japanese Interest Rates Be At Zero Forever?
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.