Yields Explode, Fed To ‘Make A Big Blunder’ Hiking Into Oil Shock | David Rosenberg

**David Rosenberg** (0:00)
I should say right now, I think the Fed is going to make a big blunder. The markets, and now it's not just one rate hike being priced in, it's multiple. I frankly think it's going to be a pretty big policy mistake. It will take us in the law of unintended consequences. We are in a riskier investing environment right now.
And that means that you don't really want to take on duration in the bond market. And it means you want to at the margin start de-risking in the stock market.

**David Lin** (0:27)
Pleased to welcome back David Rosenberg, President of Rosenberg Research. And treasury yields are soaring today on Tuesday, September 1st, a 10-year hit 4.79%.
Today, the fifth straight session higher, now the highest since January 2025 This comes in the back of renewed strikes against Iran with oil going higher. What's next for macro landscape? What's next for monetary policy? And David has a new ETF. We'll talk about that. And we'll talk about some of the major themes that he's investing in and tracking. And now finally, putting his money where his mouth is, so to speak, with his launch. Thank you. Thank you very much for joining us on today. David, congrats on the launch.

**David Rosenberg** (1:05)
Thanks for the invite. Thank you.

**David Lin** (1:07)
This launch is September 9th. Very exciting. Ticker R-O-S-Y.
Let's just start there because it tracks the top major themes that you're following. And it's a little bit different from the Rosy portfolio tracker that some of us model portfolio, rather, that some of us are already familiar with. So tell us about the major themes that you're tracking right now and what we can expect.

**David Rosenberg** (1:28)
Okay. Well, let me first say that Corton Capital, which is a boutique Toronto-based ETF provider, they are the portfolio managers on the fund. They actually own the fund. And I am the principal economic guru who is really the inspiration behind how this is going to go. But Corton pulls the trades and they're based on the top conviction, themes and ideas from Rosenberg Research.
So, yeah, it launches September 9th. And the way it's constructed right now is really a barbell between fixed income in areas of the world with flat yield curves and high real interest rates and hard assets.
And it's not just a hedge against goods inflation coming from all sources, but also from a new secular theme, which is going to be security of supply when it comes to food and energy and critical minerals and base metals. So you're going to find it's got a hard asset feel to it, coupled with a cash flow stream. So yeah, this is very exciting. You know, I start my business in January 2020 I'm 60 years old, started a new business. I'm 65, and I'm involved with Corton Capital in this launch of the ROSY ETF. It will be listed on the TSX. And also, I forgot to tell you, David, that I have a book coming out that will be published in early October that's titled The Bear and the Bullring. So people say to me, what are you doing all this when you're in your 60s? And it's because I have this fear that if I slow down, I'm going to keel over. So this is purely for sustenance and longevity.

**David Lin** (3:32)
The Bear and the Bullring, is that you right now? Do you feel like you're a Bear and the Bullring?

**David Rosenberg** (3:36)
You know, it's more because the Bear status is, of course, I bear that. That's been my moniker for decades. So you can't hide from that. The whole reason why I started the ROSY Model Portfolio back in the beginning of 2023, by the way, it's up more than 60% with a 0.4 beta to the S&P and 0.7 beta to the 60-40 was to show the world that, yes, this radical perma bear can actually make you money in a thoughtful way. And that's exactly what it's done.
Yeah, you know, you mentioned that market rates are backing up dramatically. I do believe that, you know, you have a 3% real yield now in the long bond and you have almost 2.5% real yield in the 10-year note. That's a very nice cushion to have. Of course, you're standing in the middle of a freight train right now because nominal yields are backing up. But they're not backing up because of inflation expectations. You know, you look at the break even levels in the five-year, five-year forwards, they're basically around 2.3%. They haven't really moved that much. It's all been, you know, the risk premium associated with a whole bunch of things that we could talk about, which I think at some point will get resolved. I'd be more hard-pressed to have that view if inflation, in my opinion, and I don't have Kevin Warsh's opinion on inflation.