Latest / The Paul Barron Crypto Show / No Rate Cut Possible?📈Macro Outlook w/ Darius Dale

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No Rate Cut Possible?📈Macro Outlook w/ Darius Dale · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Let's get into it today. We're going to have a
• 0:01
  Speaker 1: special guest and we're going to talk about FED rate cuts.
• 0:03
  Speaker 1: Will they happen? Will they not happen? What is the
• 0:06
  Speaker 1: market going to look like?
• 0:07
  Speaker 2: You're in.
• 0:07
  Speaker 1: My name is Paul Barron. Welcome back into the show.
• 0:09
  Speaker 1: Let's get started. I want to thank our sponsor, that's
• 0:12
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• 0:37
  Speaker 1: does help the channel. Thank you so much for all
• 0:39
  Speaker 1: that good stuff. All right, So I want to jump
• 0:40
  Speaker 1: to a clip real quick. This is of our guest
• 0:43
  Speaker 1: today and is his insights to take a look on
• 0:46
  Speaker 1: where the risk markets are going.
• 0:47
  Speaker 3: Take a look.
• 0:49
  Speaker 4: The risk asset is the treasury bond market. It's not stocks,
• 0:53
  Speaker 4: it's not gold, it's not bitcoin, and that's exactly what
• 0:55
  Speaker 4: the market is telling you today. From a your today
• 0:58
  Speaker 4: performance perspective, there is a geo politically driven supply demand
• 1:02
  Speaker 4: and balance in the treasury market.
• 1:04
  Speaker 3: We have less.
• 1:05
  Speaker 4: Demand and more supply, and neither political party here in
• 1:09
  Speaker 4: the United States of America has any real political will
• 1:12
  Speaker 4: to fix it. The best way to be exposed to
• 1:16
  Speaker 4: financial market risk, certainly throughout the duration of afore turning
• 1:19
  Speaker 4: poly crisis, is via risk assets, because there are very
• 1:23
  Speaker 4: limited levers that the sovereign can pull to get itself
• 1:26
  Speaker 4: out of this mess.
• 1:28
  Speaker 1: All right, So bringing in the real Darius Dale coming
• 1:31
  Speaker 1: in and no longer a clip.
• 1:33
  Speaker 3: How are you, man, I'm great man. It's great to
• 1:35
  Speaker 3: be back, man, handsome guy. Huh, nice to see it.
• 1:38
  Speaker 1: Nice to see you.
• 1:39
  Speaker 5: Hey.
• 1:39
  Speaker 1: Listen, that was some pretty good statements there. I think
• 1:43
  Speaker 1: you are kind of positioning the markets around this. Let's
• 1:46
  Speaker 1: dive a little bit deeper on this. This is a
• 1:48
  Speaker 1: Kobeec point that they were hitting on, kind of in
• 1:52
  Speaker 1: line with what you're talking about. US treasury posts of
• 1:54
  Speaker 1: two undred ninety one billion in budget deficits in July,
• 1:57
  Speaker 1: second largest of any July on record. Twenty seven billion
• 2:01
  Speaker 1: budget surplus is what we're looking at terms right now.
• 2:05
  Speaker 1: Also in terms of government spending surge nine point seven
• 2:09
  Speaker 1: this year over year, so another six hundred and thirty billion,
• 2:11
  Speaker 1: so second highest since January. All of these macro environments
• 2:15
  Speaker 1: continue to put a lot of pressure, Darius on the economy.
• 2:19
  Speaker 1: But at the same time, we've got a lot of
• 2:20
  Speaker 1: investors that are saying, what do I do? What do
• 2:23
  Speaker 1: I do? Where are the plays right now? Extend a
• 2:26
  Speaker 1: little bit further on your analysis.
• 2:29
  Speaker 6: Paul, Well, thanks again for having me on the program. Brother,
• 2:31
  Speaker 6: appreciate you in terms of so you know what, my
• 2:34
  Speaker 6: answer to that is always going to be kissed. Obviously,
• 2:36
  Speaker 6: stocks go bigpoint, stocks go bitcoin. But the reason we
• 2:40
  Speaker 6: believe that's the case is because we ultimately identified that
• 2:43
  Speaker 6: geopolitical driven supply and demand and balance in the church
• 2:45
  Speaker 6: bond market a couple of years ago, and every step
• 2:48
  Speaker 6: that the both administrations have taken thus far tells us
• 2:52
  Speaker 6: that a that is likely to persist and be the
• 2:55
  Speaker 6: only way we're going to fix it or resolve it
• 2:57
  Speaker 6: or even address it. Are things that would likely to
• 3:00
  Speaker 6: cause the price of the equity market, the price of
• 3:03
  Speaker 6: the goal bullion, and price of bitcoin to go much higher.
• 3:05
  Speaker 6: In price, and obviously our clients have benefited tremendously from
• 3:08
  Speaker 6: that over the past few years.
• 3:10
  Speaker 1: So easy to keep it simple. I think you know
• 3:13
  Speaker 1: when you look at those many because this right now,
• 3:15
  Speaker 1: I think a lot of investors are trying to position
• 3:19
  Speaker 1: around this, and in some cases they get a little
• 3:21
  Speaker 1: cute with how they're trying to play their portfolio, which
• 3:23
  Speaker 1: is where mistakes usually happen. I want to go to
• 3:27
  Speaker 1: this clip here. This is Scott Besson talking about how
• 3:30
  Speaker 1: much money is being taken in on tariffs, and I
• 3:32
  Speaker 1: want to ask you think about this of how tariffs
• 3:35
  Speaker 1: are going to affect the market. Let's take a look.
• 3:38
  Speaker 7: I think August September is going to be a very
• 3:41
  Speaker 7: good test. I've been saying that I think we can
• 3:44
  Speaker 7: take in three hundred billion, and as the Treasury Secretary,
• 3:49
  Speaker 7: I like to be conservative, but there is a chance
• 3:52
  Speaker 7: that I'm going to have to substantially upgrade that number.
• 3:56
  Speaker 7: And Maria, the way to think about it for your
• 3:58
  Speaker 7: viewers is every three hundred billion dollars is one percent
• 4:03
  Speaker 7: of GDP. We were left with a mess. The deficit
• 4:06
  Speaker 7: to GDP six point five, six point seven percent highest
• 4:10
  Speaker 7: when we are not a recession, not at war. So
• 4:13
  Speaker 7: just the tariff revenue can bring that down into the fives,
• 4:17
  Speaker 7: which fits with this administration's plan of getting the deficit
• 4:22
  Speaker 7: to GDP back into the threes the long term average
• 4:26
  Speaker 7: before President Trump leaves office.
• 4:28
  Speaker 1: All right, So Scott Bessen kind of laying out his
• 4:31
  Speaker 1: plan there of how he thinks this can be corrected.
• 4:33
  Speaker 1: Do you think that tariffs are going to have any
• 4:36
  Speaker 1: impact on what they are trying to do in DC?
• 4:40
  Speaker 6: Great question, So let me answer that in two ways,
• 4:44
  Speaker 6: because both are very important for investors. So on the
• 4:47
  Speaker 6: deficit reduction. So I've known Scott for many years as
• 4:49
  Speaker 6: a former client, very serious man, has very big ambitions
• 4:53
  Speaker 6: with regards to the fiscal conference in the fiscal health
• 4:56
  Speaker 6: of the United States. It's highly unlikely that we see
• 5:01
  Speaker 6: tariffs alone having make a material dent.
• 5:04
  Speaker 3: In terms of putting us on a sustainable fiscal trajectory.
• 5:06
  Speaker 6: In fact, when you look at the July monthly Treasury
• 5:09
  Speaker 6: budget statement, we analyze the budget statement. One of the
• 5:12
  Speaker 6: ways in which we analyze it of a myriad of ways,
• 5:15
  Speaker 6: but one of the more important ways is the annualized
• 5:18
  Speaker 6: fiscal year to date year over year change. And when
• 5:21
  Speaker 6: you look at that inclusive of tariff revenue, that's tracking
• 5:24
  Speaker 6: up one hundred and eleven percent year to date. We're
• 5:27
  Speaker 6: not quite annualizing at three in a billion in revenue
• 5:30
  Speaker 6: yet we're about halfway there. But even with halfway there,
• 5:33
  Speaker 6: we still have a budget deficit that is up about
• 5:35
  Speaker 6: one hundred and twenty two billion dollars on a fiscal
• 5:38
  Speaker 6: year today annualize fiscal year today basis year over year,
• 5:41
  Speaker 6: and so that can that reminds me and to remind
• 5:44
  Speaker 6: investors that the drivers of the deficit, particularly the categories
• 5:48
  Speaker 6: that our friend over at Force for the trees, Luke Growman,
• 5:51
  Speaker 6: you know, is true. Just expense metric, you know, Medicare,
• 5:53
  Speaker 6: National Defense, and net interest in social security. That's really
• 5:56
  Speaker 6: what's driving the budget deficit. And that stuff's been compounded.
• 5:59
  Speaker 6: One it's about two thirds of the overall federal expenditures
• 6:02
  Speaker 6: when you had all those four categories up and on
• 6:04
  Speaker 6: its way higher by the way, as a function of
• 6:06
  Speaker 6: the one bigly bill, those things are compound to get
• 6:09
  Speaker 6: plus eleven twelve percent year after year after year after year.
• 6:12
  Speaker 6: So we have to raise all this terar for revenue
• 6:15
  Speaker 6: just to sort of maybe hope to offset the growth
• 6:18
  Speaker 6: in those categories.
• 6:19
  Speaker 3: And oh, by the.
• 6:20
  Speaker 6: Way, we have a big tiscal you know, a task
• 6:22
  Speaker 6: cup program that's going to start to get the tape
• 6:24
  Speaker 6: in early twenty twenty six as well. So, uh, there's
• 6:27
  Speaker 6: a lot of running in place, if you will think
• 6:29
  Speaker 6: about this retrenchment standpoint.
• 6:31
  Speaker 1: With with that being said, obviously we saw the Genius
• 6:34
  Speaker 1: Act go through. Stable Coins are now part of maybe
• 6:37
  Speaker 1: best since long term plan here because this is in
• 6:40
  Speaker 1: some way a way to shore up the dollar. Stable Coins,
• 6:43
  Speaker 1: digital tokens peg to a national currency. Most often right
• 6:47
  Speaker 1: now it's the US dollar. Ninety percent of all stable
• 6:49
  Speaker 1: coins right now are backed either by cash deposits or
• 6:52
  Speaker 1: short term US treasures. That's going to potentially, you know,
• 6:56
  Speaker 1: prop up the treasury market itself. So when you look
• 6:59
  Speaker 1: at best Since vision, every stable coin minted worldwide now
• 7:02
  Speaker 1: becomes kind of a new funding of the US government.
• 7:05
  Speaker 1: He states it there. I mean, because this is now
• 7:07
  Speaker 1: stable coins could go into all sorts of countries, a
• 7:10
  Speaker 1: lot of you know, second tier markets that have been
• 7:13
  Speaker 1: looking for dollars for a while. Now they get them,
• 7:15
  Speaker 1: and of course that backstops these US treasuries in terms
• 7:19
  Speaker 1: of the asset. How would that make any difference in
• 7:23
  Speaker 1: his plan to try to write the ship there in DC.
• 7:26
  Speaker 3: It's not going to write the ship.
• 7:27
  Speaker 6: But I think it's a brilliant strategy, and it's consistent
• 7:30
  Speaker 6: with our paradigm C inspired view that the administration would
• 7:34
  Speaker 6: carry on and continue our fellow Yelly Jenny Yellen's dubbsch
• 7:38
  Speaker 6: net financing policy. So part of so, when you have
• 7:41
  Speaker 6: a fiscal problem, there's a bunch of levers governments tended pulled.
• 7:44
  Speaker 6: The primary levers are trying to cut you away out
• 7:46
  Speaker 6: of the problem. You can try to grow your out
• 7:48
  Speaker 6: of the problem, which is what the Trump administration pivoted
• 7:50
  Speaker 6: to on April ninth. And then now eventually you're gonna
• 7:53
  Speaker 6: have to wind up print of your out of the problem.
• 7:54
  Speaker 6: That could be years down the road. Part of that,
• 7:56
  Speaker 6: one of those levers that you can pull in the
• 7:58
  Speaker 6: context that grow you out of the problem is shifting
• 8:01
  Speaker 6: to dubbish and net financing policy. Right now, T bills
• 8:04
  Speaker 6: are about twenty one percent outstanding of total marketable treasure securities.
• 8:07
  Speaker 6: The percent of marketable treasury securities that mature in the
• 8:10
  Speaker 6: next calendar year is about thirty one percent. Those numbers
• 8:13
  Speaker 6: were as high as thirty five percent and forty eight percent,
• 8:16
  Speaker 6: respectively in terms of those respective time series. So we
• 8:20
  Speaker 6: know we're going to continue to finance on the short
• 8:22
  Speaker 6: end of the curve. So the genius act is in
• 8:24
  Speaker 6: fact genius in terms of meeting the market in terms
• 8:28
  Speaker 6: of demand, meeting the supply that they were going to
• 8:30
  Speaker 6: bring to the market where the demand with growth in
• 8:32
  Speaker 6: the market is going to be, and that's going to
• 8:34
  Speaker 6: artificially depress yields. And I'll take I'll take the other
• 8:38
  Speaker 6: side of one of the things you said, respectfully, Paul,
• 8:40
  Speaker 6: is that when you finance, when you capitalize on the
• 8:43
  Speaker 6: short end of the curve, what happens is you roll
• 8:45
  Speaker 6: over FX head just much more quickly. And so the
• 8:48
  Speaker 6: likelihood that we see as sustained bear market in the
• 8:50
  Speaker 6: dollar is a lot higher. The probability is much higher
• 8:53
  Speaker 6: when you when you capitalize on the short end of
• 8:55
  Speaker 6: the curve as it is when you capitalize on the
• 8:57
  Speaker 6: long end of the curve.
• 8:58
  Speaker 1: Okay, So with that being said, and you look at
• 9:03
  Speaker 1: PPI just coming in much hotter, rises to three point
• 9:07
  Speaker 1: three expectations two point five core PPI going to three seven,
• 9:11
  Speaker 1: up from two nine on expectations. How does this play
• 9:15
  Speaker 1: into this because the FED is now in a really
• 9:17
  Speaker 1: really tight spot. You've got interesting data coming in, You've
• 9:22
  Speaker 1: got pressure from DC, the Trump administration continuing to pressure Powell.
• 9:27
  Speaker 1: All of this does does the macro environment change at
• 9:31
  Speaker 1: all right now, at least in the near term, which
• 9:34
  Speaker 1: is September coming up.
• 9:36
  Speaker 8: Yeah, So, I mean, in our opinion, it can change
• 9:40
  Speaker 8: if the Pow FED commits to making its fifth major
• 9:44
  Speaker 8: policy mistake, called they were too slow to the overtightened
• 9:47
  Speaker 8: in twenty eighteen, they were too slow to ease in
• 9:48
  Speaker 8: twenty twenty, they were too slow to tighten in twenty
• 9:50
  Speaker 8: twenty one, they were asleep at the regional bank supervision
• 9:53
  Speaker 8: will in twenty twenty three, and then in our opinion,
• 9:55
  Speaker 8: we think they're too slow to easier in twenty twenty five.
• 9:58
  Speaker 6: They're angered on future values for the most lagging indicator
• 10:03
  Speaker 6: of the business cycle. To set prospective monetary policy with
• 10:06
  Speaker 6: I don't even care what the inflation numbers are. That
• 10:08
  Speaker 6: is a policy mistake, especially in the context of the
• 10:11
  Speaker 6: worst part of the U shaped economy that we've been
• 10:13
  Speaker 6: calling for. We are now in the worst part of
• 10:15
  Speaker 6: the you, which is the bottom left side of the you,
• 10:17
  Speaker 6: and so we need policy support to both shore up
• 10:20
  Speaker 6: confidence among investors but also to show up confidence among
• 10:23
  Speaker 6: business builders and employers like myself that hey, we can
• 10:26
  Speaker 6: actually pride our way through this rough patch that's caused
• 10:29
  Speaker 6: by the advent of this tariff shock.
• 10:30
  Speaker 3: It's not a durable shock.
• 10:31
  Speaker 6: It's just a you know change that's going to cause
• 10:34
  Speaker 6: a lot of you know problems and one time price
• 10:36
  Speaker 6: adjustments across various sectors of the economy. And you need
• 10:39
  Speaker 6: the FED to play ball in order to ride us through,
• 10:41
  Speaker 6: to help us ride through that, and so in our opinion,
• 10:43
  Speaker 6: you can see some volatility if they do.
• 10:45
  Speaker 1: Not, okay, So that's going to lead to some interesting mark.
• 10:48
  Speaker 1: It's Tom Lee. I don't know if you follow Tom,
• 10:50
  Speaker 1: but he of course funstrat he's jumping in. He's one
• 10:55
  Speaker 1: of the goats. Well right now, he's the number one,
• 10:57
  Speaker 1: the number one major league investor out there. Number one,
• 11:01
  Speaker 1: since late twenty two twenty two, every dip has been bought.
• 11:04
  Speaker 1: Number two, since late twenty two, every dip has been bought.
• 11:07
  Speaker 1: And number three since late twenty two, every dip has
• 11:10
  Speaker 1: been bought. And he's talking about it again. By these
• 11:13
  Speaker 1: dips as we start to see them come in. Do
• 11:17
  Speaker 1: you agree with where his frame of reference is right now?
• 11:20
  Speaker 1: Because he's very bullish on where the market could be going.
• 11:23
  Speaker 3: Lookay, I don't think there's an institution investor on.
• 11:26
  Speaker 6: Global Wall Street that's been more bullish than Darius Dale
• 11:28
  Speaker 6: since May night of tuning to Tom Lee has joined
• 11:32
  Speaker 6: me in this.
• 11:34
  Speaker 1: Darius was the o G. Tom Lee came to the
• 11:36
  Speaker 1: party late.
• 11:37
  Speaker 6: Okay, yeah, let's be I love Tommy, he's one of
• 11:40
  Speaker 6: the ghats, but let's be honest here.
• 11:42
  Speaker 3: We aunted the paradigm cview back in late April.
• 11:45
  Speaker 6: We essentially said, hey, the administration is pivoting from cutting
• 11:48
  Speaker 6: their out of the nests to growing there out of
• 11:49
  Speaker 6: the nest.
• 11:50
  Speaker 3: You need to be very, very publishous is going to
• 11:52
  Speaker 3: last multiple years.
• 11:53
  Speaker 6: And so you know, obviously we've seen a wave of
• 11:56
  Speaker 6: upside capitulation across Global Wall Street for his social investers
• 11:59
  Speaker 6: and obviously reach as well to get aligned with our view,
• 12:01
  Speaker 6: and we expect that view to persist even if we
• 12:05
  Speaker 6: get some sort of pall policy mistake driven volatility in
• 12:09
  Speaker 6: the next couple of months. You still got to buy
• 12:11
  Speaker 6: that dick because there's a whole coord of investors that
• 12:13
  Speaker 6: are not aligned.
• 12:14
  Speaker 3: With our long term structurally village paradigm cview.
• 12:18
  Speaker 1: What do you make? Okay, so so far we're in agreement.
• 12:21
  Speaker 1: I'm following along with the I'm drinking the Darius Stale
• 12:24
  Speaker 1: forty two macro milk.
• 12:28
  Speaker 3: I like being You're a smart dude, Paul. This is great.
• 12:30
  Speaker 1: I'm just following the smart people. That's all I do.
• 12:33
  Speaker 1: But Lynn Alden is another small smart person and she
• 12:36
  Speaker 1: kind of goes on right here and she's saying, let's
• 12:39
  Speaker 1: see what happens with the BLS data currently stands FORIGN
• 12:42
  Speaker 1: producers Inagrid haven't followed lower prices to offset the tariff
• 12:45
  Speaker 1: expenses paid by US importers, so we're probably going to
• 12:49
  Speaker 1: see some adjustments within that right now. Will that possibly
• 12:54
  Speaker 1: cause some struggles for Powell right now at least on
• 12:57
  Speaker 1: some of the data that could still be coming in
• 13:00
  Speaker 1: with inflation maybe starting to tick up slightly here before
• 13:03
  Speaker 1: he is his h September FED meeting.
• 13:06
  Speaker 3: Yeah, so appreciate you highlighting Lynn.
• 13:08
  Speaker 6: I think she's also one of the amazing The one
• 13:11
  Speaker 6: thing I would say on we can't read too much
• 13:13
  Speaker 6: into anything we've seen reported thus far, and the reason
• 13:16
  Speaker 6: for is We've seen one terrorfvolatility. We've seen teriff rates
• 13:20
  Speaker 6: go up and down as a function of the negotiating
• 13:22
  Speaker 6: process that we've been involved in. Two, we've seen a
• 13:24
  Speaker 6: tremendous amount of front running of inventories prior to certain
• 13:28
  Speaker 6: terif announcements for different sectors in different countries, and so
• 13:31
  Speaker 6: there's a lot of non tariff goods sitting in inventories
• 13:35
  Speaker 6: and warehouses and retail and on retailer shelves around the country.
• 13:38
  Speaker 6: So we haven't really seen the pinch yet, both in
• 13:40
  Speaker 6: terms of corporate writing margins, but also in terms of consumers.
• 13:43
  Speaker 6: That pinch is coming. We know it's gonna come. It's
• 13:46
  Speaker 6: not gonna come at all once. It's gonna come.
• 13:48
  Speaker 3: Over the tended period of time across different sectors of
• 13:50
  Speaker 3: the economy.
• 13:51
  Speaker 6: So it's gonna feel like a slow moving, sole building
• 13:54
  Speaker 6: wave of inflation, and ultimately it's going to be playing
• 13:57
  Speaker 6: hot potato. We're gonna see the import prices going in
• 13:59
  Speaker 6: a little bit. We're going to see operating margins go
• 14:01
  Speaker 6: to go down, lit we're going to see inflation you
• 14:02
  Speaker 6: go up a little bit.
• 14:03
  Speaker 3: And the net result, in our opinion, is an economy
• 14:06
  Speaker 3: that should make it through the bottom of that U
• 14:08
  Speaker 3: shaped economy, unscathed, just in time for the boom that
• 14:11
  Speaker 3: we're likely to see in twenty twenty six.
• 14:14
  Speaker 1: Okay, well listen, I mean this is guys, we're giving
• 14:17
  Speaker 1: you some of the best alpha that is out there
• 14:19
  Speaker 1: right now. Pay attention. I'm just telling you, pay attention
• 14:22
  Speaker 1: to what's being said right now. I'm going to Okay,
• 14:25
  Speaker 1: so we're gonna get into some predictions here on how
• 14:27
  Speaker 1: the Fed's going to handle this, what the twenty twenty
• 14:29
  Speaker 1: five looks like you're in and next year, so stick
• 14:31
  Speaker 1: around for this, Darius. Before we do that, I want
• 14:33
  Speaker 1: to go to the CNBC clip and they're talking about
• 14:36
  Speaker 1: a fifty basis point rate cut. That's kind of crazy
• 14:40
  Speaker 1: to hear, but listen to what they had to say.
• 14:43
  Speaker 5: You can't they're not just concrete numbers. And one to
• 14:45
  Speaker 5: three percent on inflation is about the best really that
• 14:49
  Speaker 5: that agency can give you. And if employment looks weak,
• 14:52
  Speaker 5: you should cut.
• 14:54
  Speaker 2: I completely agree with that. The worry is that these
• 14:56
  Speaker 2: job numbers got revised down very you know, very big,
• 15:01
  Speaker 2: unusually big, and we before that we had to disconnect
• 15:05
  Speaker 2: where GDP numbers have been weak about one point one
• 15:09
  Speaker 2: percent for the first half of the year, jobs number
• 15:12
  Speaker 2: has been strong, and then the jobs data got revised
• 15:16
  Speaker 2: towards GDP, and so we now know that the economy
• 15:19
  Speaker 2: has been growing weaker. And so a four point three
• 15:22
  Speaker 2: to three FED funds rate is just is just too high.
• 15:25
  Speaker 2: And the market will always tell you what you should
• 15:27
  Speaker 2: be doing. And we see the inversion at the front
• 15:30
  Speaker 2: end of the curve, which is over fifty basis points
• 15:33
  Speaker 2: tells us that we could easily do a fifty basis
• 15:36
  Speaker 2: point makeup cut because the data had been wrong in
• 15:40
  Speaker 2: the past without disrupting anything at all. So it seems
• 15:44
  Speaker 2: like pretty much a no brainer to me.
• 15:46
  Speaker 1: All right, So this goes back to my thesis, which
• 15:49
  Speaker 1: was last month saying, because I was on record, I
• 15:51
  Speaker 1: just simply said, I think we're going to we deserve
• 15:53
  Speaker 1: a rate cut in July based on the data we're getting.
• 15:56
  Speaker 1: He just said, makeup rate cut. So if we've got
• 16:00
  Speaker 1: potentially that in play September, what would Darius Dale be
• 16:05
  Speaker 1: doing if you were running the FED right now, Give
• 16:06
  Speaker 1: me a quarter, give me fifty, how would you play
• 16:09
  Speaker 1: this toward the end.
• 16:10
  Speaker 6: Of the Darysdale or his former client, Secretary Scott Bessemer
• 16:13
  Speaker 6: running the FED right now, the Fed funds rate would
• 16:15
  Speaker 6: be below three percent. There's no reason at all four
• 16:19
  Speaker 6: and a half percent Fed funds rate for a variety
• 16:21
  Speaker 6: of reasons.
• 16:21
  Speaker 1: Most of all that goes back to what Scott said.
• 16:23
  Speaker 1: He said, a full point and a half is where
• 16:26
  Speaker 1: it should be.
• 16:26
  Speaker 3: Yeah, well, the man's form client.
• 16:30
  Speaker 6: So the point I'm making is that the two things
• 16:34
  Speaker 6: out points I'm making. One, the data had deteriorated enough
• 16:37
  Speaker 6: just toward a fifty basis point cut. In September, recall
• 16:40
  Speaker 6: that we published a op ed on the evening of
• 16:43
  Speaker 6: the July f MC meetings saying, hey, you guys made
• 16:45
  Speaker 6: a policy mistake. This is another policy mistake. Fast forward
• 16:48
  Speaker 6: two days later to the job support. Then everyone else
• 16:50
  Speaker 6: agrees finally, so it corrects me. But more importantly, this
• 16:55
  Speaker 6: is a federal reserve institution that is operating with a
• 16:58
  Speaker 6: legacy inflation tart two percent that is asinine and does
• 17:02
  Speaker 6: not make sense.
• 17:03
  Speaker 3: For today's economy.
• 17:05
  Speaker 6: There are so many structural reasons why their policy is
• 17:08
  Speaker 6: too tight because of their arbitrary two percent inflation target.
• 17:12
  Speaker 6: And we've been preaching very hard to catalyze regime change
• 17:15
  Speaker 6: at the federal reserve. We think it's coming, and KISS
• 17:18
  Speaker 6: is very very well positioned for you.
• 17:21
  Speaker 1: All right, So I'm going to show you this tweet
• 17:23
  Speaker 1: right here. It's basically that, you know, the cabal of
• 17:26
  Speaker 1: twelve unelected, unaccountable people that's pricing money right now? What
• 17:31
  Speaker 1: do you think is going to happen? I gotta get
• 17:33
  Speaker 1: you on record. What do you think is going to
• 17:34
  Speaker 1: happen in September? What happens in September?
• 17:37
  Speaker 6: I believe there's going to be a twenty five base
• 17:39
  Speaker 6: point rate cut until they get that FED funds rate
• 17:41
  Speaker 6: to at least three percent. I would say probably two
• 17:43
  Speaker 6: and a half percent. They're making the policy mistake. Hey,
• 17:46
  Speaker 6: there needs to regime change that institution.
• 17:50
  Speaker 1: Wow, okay, well there you guys have it?
• 17:52
  Speaker 3: Are you? Yeah?
• 17:54
  Speaker 5: For sure?
• 17:54
  Speaker 6: Why are you guys who will listening to me talk
• 17:56
  Speaker 6: right now? Where do you position appropriately forward or not?
• 17:59
  Speaker 6: It's coming because this is one of the.
• 18:01
  Speaker 3: Easiest levers any administration around the world can pull to
• 18:04
  Speaker 3: help caw their way out of a debt problem. It's coming.
• 18:07
  Speaker 3: Position for it, Kiss as well positioned for that?
• 18:10
  Speaker 4: All right?
• 18:10
  Speaker 1: I'm getting okay, I'm getting two work questions here because
• 18:13
  Speaker 1: we're trying to.
• 18:15
  Speaker 4: All Right, So.
• 18:17
  Speaker 1: Let's say Powell is completely ignoring everything that he's being
• 18:20
  Speaker 1: fed right now, and he simply says, no rate cut.
• 18:24
  Speaker 1: What is the chances of no rate cut through the
• 18:27
  Speaker 1: end of the year. Do you think it's very low
• 18:29
  Speaker 1: or no?
• 18:30
  Speaker 6: I think the chance of no rate cut through the
• 18:32
  Speaker 6: year is actually a meddling probability, So probably fifty to fifty.
• 18:35
  Speaker 6: Because you have a guy who's determined to protect his legacy.
• 18:38
  Speaker 6: He let the inflation genie out the bottle by overcooking
• 18:41
  Speaker 6: monetary policy in the context of historically expansion and fiscal
• 18:44
  Speaker 6: policy in twenty twenty, twenty twenty one, and now he
• 18:46
  Speaker 6: wants to retire as someone who put it back into
• 18:49
  Speaker 6: the bottle.
• 18:50
  Speaker 3: Well, loose less for you, mister Powell. If you had
• 18:52
  Speaker 3: just been running sound monetary policy the whole time, you
• 18:55
  Speaker 3: wouldn't be in this mess and you would able to
• 18:56
  Speaker 3: be able to say incredibletful monetary policy for today economy,
• 19:00
  Speaker 3: not your future legacy.
• 19:02
  Speaker 1: He's projecting Volkler, that's what he's doing. He's projecting what
• 19:07
  Speaker 1: he is exactly.
• 19:08
  Speaker 3: He's aholic. I like it, tell step program.
• 19:14
  Speaker 1: Twelve program, I love it. End of your end of
• 19:17
  Speaker 1: year bullish, bearish.
• 19:20
  Speaker 3: In view, you have to buy eighty dip as long
• 19:22
  Speaker 3: as we're in paradigm C.
• 19:24
  Speaker 6: So somebody who say we're going back to paradigm B,
• 19:26
  Speaker 6: we're going way higher in stocks, go bitcoin and kiss.
• 19:30
  Speaker 1: All right, and then last point twenty twenty six, do
• 19:33
  Speaker 1: we start to see a fall off in the market
• 19:35
  Speaker 1: or do you feel like twenty twenty six is a
• 19:37
  Speaker 1: is a big year for investments.
• 19:39
  Speaker 6: I think the biggest test for the market over the
• 19:41
  Speaker 6: next twelve to eighteen months will come in the midterm
• 19:44
  Speaker 6: elections in twenty twenty six, because that could potentially truncate
• 19:47
  Speaker 6: the levers that the Trump administration can pull to maintain
• 19:50
  Speaker 6: paradigm C. If they get forced out of paradigm C
• 19:53
  Speaker 6: by fiscal policy maker by you know, by Congress essentially,
• 19:56
  Speaker 6: or by Congress that becomes less amenable to their state
• 20:00
  Speaker 6: aid desire to enact regime change at the FED, then
• 20:02
  Speaker 6: we get on some serious problems from much higher prices.
• 20:05
  Speaker 1: Yeah for sure. All right, listen, guys, we are going
• 20:08
  Speaker 1: to We'll get Darius back on. He's always dropping bombs
• 20:10
  Speaker 1: out here on the show. I love it when you're on.
• 20:13
  Speaker 1: Thank you so much for coming on today. We appreciate it, Darius.
• 20:16
  Speaker 3: Always a pleasure, Paul, appreciate you, brother. You bet all right.
• 20:18
  Speaker 1: So you guys, we will get more of this for you,
• 20:21
  Speaker 1: because this is going to be a heated, heated next
• 20:23
  Speaker 1: few months with everything that's happening with the Fed. What
• 20:26
  Speaker 1: we'll see in the market is obviously Bitcoin hitting its
• 20:28
  Speaker 1: all time high. If you're not part of our Diamond Circle,
• 20:30
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• 20:33
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• 20:36
  Speaker 1: follow me out there on X at Paul Baron. We'll
• 20:38
  Speaker 1: catch you next time right here on The Paul Baron Show.