The Parabolic Seven & The IBM Warning Sign with Ben Emons of FedWatch Advisors

**Dan Nathan** (0:04)
All right, welcome to the Risk Reversal Podcast. I am Dan Nathan, that is Guy Adami. Hi, Guy.

**Guy Adami** (0:08)
Hello, Dan.

**Dan Nathan** (0:09)
Guy, this is one of those, I don't know, crossover episodes, if you will, of the Risk Reversal Podcast. We are joined by a good friend of ours, someone we've got to know from CNBC's Fast Money. That is Ben Emons. He is the founder and chief investment strategist at FedWatch Advisors. Ben, welcome to the podcast.

**Ben Emons** (0:28)
Thank you, Dan. Thank you, guys. It's great to be on with you this time. We do it normally on Fast Money, but this is fantastic. Thank you for having me.

**Guy Adami** (0:34)
We're honored to have you, and I think it's full disclosure. You're not only a participant on Fast Money, but you often watch the show, if I'm not mistaken.

**Ben Emons** (0:44)
Every day. If I can't watch it, I listen on my phone. I basically don't skip a day, unless I have really something else. But yeah, and I've been watching it since, I think it was 2008 or 2009

**Guy Adami** (0:57)
Wow.

**Ben Emons** (0:58)
So that long, because I'll give you the anecdote how that actually happens. This is a short intro, but that was a pimp code at the time, and Bill Gross never allowed the TV on in the afternoons and the financial crisis hit, and then he turned on the TV, and when he watched Fast Money, I think he wanted to watch it for traders commentary, and that's how I got into it. And since then, I've been a bit of a fan, and now myself on the show is pretty amazing.

**Dan Nathan** (1:23)
Yeah, well, Guy Adami, the fact that you've had to put up with him since 08, 9 is absolutely amazing, and the fact that the Bond King was all over. Guy Adami is the new Bond King. How about that guy? We miss Bill Gross in his views on the markets.

**Ben Emons** (1:37)
Yeah, he's retired. I think he's taking it easy now, but he still puts out his newsletter, I believe, occasionally.
Yeah, it would be great to hear him again sometime. Yeah, he's an amazing force, amazing, knowledgeable guy on the markets, for sure.

**Guy Adami** (1:52)
Well, it's funny you tell that story because I had heard similar over the years, and I was always somewhat incredulous, but as the years go by, you learn that more and more people actually do watch the show. So when somebody like you watches it, it's high praise for sure. So let's get into it real quick because we're doing this on a Tuesday afternoon, Kevin Warsh testifying. It's pretty clear to me and I think you probably agree, there's a new sheriff in town in terms of how the Fed is going to operate. And I think Kevin Warsh is on a mission to change, I don't say necessarily the direction, but to change some of the narrative around the Fed. So let's start there.

**Ben Emons** (2:31)
Yeah, for sure.
In that testimony, he put a lot of emphasis on price stability. I mean, I think we're in a situation where they have to really talk about that. But the way they talk about it is going to change, because what we had, for example, yesterday with Waller, right? Like, I wrote a note about it. I got Steve Leesman, he liked the note, and he replied back to me, oh, has Warsh actually sanctioned it as he approved this? So I think we're heading maybe towards that sort of like understanding among these Fed members, like, hey, if you're doing a speech, just be mindful of how you communicate this, because what Warsh said, one of the gestures has been pretty straightforward about near term, there's going to be potentially this rate hike, right? And that's pretty strong guidance, if we saw the reaction in the markets, right? So I think Warsh wants to move really away from that, like, don't give any of that type of guidance that is debated first, and then come out with that decision, what we're going to do. So we may not see these types of speeches anymore for Waller as a practical example of a happy ending.

**Dan Nathan** (3:34)
Well, what sort of, I mean, does he have that sort of power over speakers like that? I mean, it seems like, you know, obviously your firm is called FedWatch Advisors. You've been watching the Fed for much longer than myself. It just seems like these are all their own people. They represent, you know, districts within the country. And does the Fed chair have that sort of influence over the speakers? You know, then it seems like they're out there day after day after day. And I think the guy's point is articulated, that would be worse, that he doesn't really want to have that sort of, you know, continual communication.