A New Era Is Beginning In Markets | Weekly Roundup

**Felix** (0:00)
We have to have a new name now, Forward Guidance is dead, so introducing...

**Tyler** (0:05)
Task Force.

**Quinn** (0:07)
The market right now is pricing in two hikes by mid-2027. Their hugely hawkish pivot comes at a time when oil prices are down dramatically from their last two meetings.

**Tyler** (0:19)
We got the high CPI print, peak hawkishness, Forward Guidance, and now everything's kind of collapsing.

**Felix** (0:24)
I'm still a big believer that we're hitting peak hawkishness here, but I think volatility is going to go higher at the same time.

**Quinn** (0:30)
It's easy to be hawkish when stocks are at all-time highs and everything's rosy.

**Felix** (0:36)
This hurts, but I know there's no way in hell that we're hiking at the end of this year. Nothing said on Forward Guidance is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice, or necessarily the views of Blockworks.
Our hosts, guests, and the Blockworks team may hold positions in the company's funds or projects discussed. As always, investments in blockchain technology involve risk, terms, and conditions apply. Do your own research.
All right, what's going on, everybody? Welcome back to another round of edition Forward Guidance. We are recording on the first week of the Kevin Warsh Fed. We just had the Kevin Warsh Fed first FOMC meeting this week, and we have to have a new name now. Forward Guidance is dead. So, introducing Task Force.

**Quinn** (1:38)
I feel like that's...

**Felix** (1:38)
I don't know what you count made this, but this is freaking awesome.

**Quinn** (1:42)
That's fitting for the new hairstyles too. I just laugh when we open it, it's our pictures, and Tyler looks like an absolute meathead, and I look like a convict, I think.

**Tyler** (1:58)
Yeah.

**Felix** (2:00)
You're saying you guys are looking better than before. So I like it.

**Tyler** (2:05)
I might keep it honestly. It's hot here in Texas.

**Quinn** (2:09)
It's scorching here, so it feels good.

**Felix** (2:13)
Nice. That's sweet. Yeah. Forward Guidance is dead, long live Forward Guidance. I mean, even though it's the name of our show, I think we've all been kind of stern critics of this style of monetary policy for a long time. Obviously, the dotplot was one of the main issues that I felt like I had. It was just completely useless. So it is interesting. So anyway, lots to talk about on this. Let's start from the top. Warsh just let on fire the statement, pretty much cut like 80 percent of it out. Very succinct.
I love the ending of it. Just the committee will deliver price stability. Mic drop. That's it.
Starting with this, curious to get you guys' thoughts on Warsh's first meeting. What's in your head?

**Quinn** (3:05)
Yeah, there's a lot. I mean, stocks ended basically the same as they were going in. So there was a lot of noise around it.

**Felix** (3:11)
After yesterday and today. Yeah.

**Quinn** (3:13)
Yeah. There's a lot of noise. I mean, I think there's a lot of good that he's talking about. We can get into some of the changes, balance sheet, updating the committee's views on how the policy verse balance sheet transmission mechanisms work for policy. This dot plot stuff is pretty wonky. I mean, their hugely hawkish pivot comes at a time when oil prices are down dramatically from their last two meetings. And I think it sort of just gives credence to the idea that, I'm skeptical that when Warsh says he wants to revamp the data, after all the stuff Trump's done, you're like, hold the phone here, what's this mean? Are we just gonna work cuts through it at any cost? But at the same time, all the best inflation forecasters knew the last two Fed meetings that this inflation thing was coming. And now the same, probably astute forecasters are seeing the disinflation coming post-war. And so it's just a classic Fed reactive months late versus front footedness. So it lends some credence to what he says there. And I think a lot of it was just to try and lay to lay to rest the Fed independence concerns and playing politics because everyone was super nervous that he was going to give in to Trump and all this stuff. And at the end of the day, nothing's really changed. Trump still wants rate cuts. Besant wants, everybody wants it.
I think they will get a less hawkish policy eventually than what was displayed this week.

**Tyler** (5:03)
Yeah, I think to keep up our peak hawkishness narrative from last week, I think maybe we were a couple of days early, but we saw the two-year-year-old spike in that flatten the yield curve. And now, today, the two-year hit 420, and it kind of backed off a couple basis points.