Power Lunch 8/28/26

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**Brian Sullivan** (0:50)
Warsh Speaks and Yields Pop. Welcome to Power Lunch, everybody. I am Brian Kelly. We'll be back on Monday. Stocks flat to a little bit down. The outlook for higher rates taking hold. Bond yields the story today, 2, 10, 30, all breaking above what some call key levels. Talk about what that means for your money. Six months now to the day into the war with Iran. Oil remains one of the markets most important and most unpredictable signals. Prices pulling back a bit from their peaks, but the geopolitical risk premium has not disappeared. And could we have another OPEC departure? We'll talk more about that. For real estate affordability, still the defining challenge of our time. High borrowing costs, tight inventory, and a slowing commercial market are forcing buyers, builders and investors to rewrite the playbook. John Peebles, he helped write the playbook. And he is here to talk more about that, and whatever else is on his mind. Hi everybody, happy Friday. Hope you're having a great start to your weekend. Let's just call it what it is. Why not? Friday, a lot of you work from home.
Lucky.
We have more in the Fed and Macro markets in a few minutes, but as you know, we also like to call these days Opportunity Fridays here on Power Lunch, and get actionable ideas all hour long. So let's just kick it off and get in with our opening market guests joining us, Permanent Portfolio Funds Fund Manager Michael Cogino and Jackson Square Capital Managing Partner Andrew Graham. Gentlemen, both, thank you very much. Andrew, I'll start with you. You're on set.
Before we get into individual stuff, anything that you want to say or what your big takeaways were, if any, from Kevin Warsh today?

**Andrew Graham** (2:28)
Well, yeah, it was more hawkish than I think the most people were expecting, and he talked a lot about AI, which I thought was sort of interesting.

**Brian Sullivan** (2:36)
Interesting, like in a good way?

**Andrew Graham** (2:38)
No, kind of interesting in a long, kind of strange way. But I mean, obviously, he's very bullish on it, and he expects a big AI productivity boost, which I do as well, and I think most people do.
I thought that was sort of informational, but the real takeaway was, yeah, you're probably going to get a rate hike in 2026 And that's meant, I think, to anchor the long end, which seemed to be working for a while, but it's come off a little bit.

**Brian Sullivan** (3:04)
So we get a rate hike from the Fed, because the bond markets, let's be clear, the bond market's already done it. The bond market's already raised rates. If the Fed raises their rate, their overnight lending rate, does that kill the stock market rally?

**Andrew Graham** (3:14)
I don't think so. I mean, if you look at flash PMIs last week, the US flash PMIs were very strong and line up with about 3% real GDP growth, which is twice that of what it was in Q2, right? So it's definitely strong. I think from a bond yield perspective, the long end is really a supply problem. It's not a monetary discipline problem. And you've got a lot of supply not only coming from the treasury, but you have a lot coming from corporates that are trying to fund their AI capital.

**Brian Sullivan** (3:43)
Michael Cagino, same question to you. Do you think that higher interest rates vis-a-vis either the Fed or the bond market will hurt, damage, kill, whatever this stock market rally?

**Michael Cogino** (3:53)
Well, the markets are already doing the Fed's job for it. So yeah, he was hawkish today on inflation, generally speaking, I don't think that was a surprise. I came in with a different take in a sense that I don't think it's a foregone conclusion that they're gonna raise rates in September, or even after that in December. I think a period of watchful waiting, looking at the data, see how sticky inflation is, whether it's energy driven, et cetera, et cetera, and then look at market rates. So I think the data is inconclusive right now.