Eric Wallerstein

the number of FOMC meetings should be 12.

at each meeting, the Fed will set a reaction function based on the incoming CPI data. if core CPI m/m is x<y<z, the fed funds rate will automatically adjust to reflect a cut, hold, or hike.

no forward guidance, all reaction function!

what month will Waller flip dovish and say hikes need to stop and the Fed must consider cuts?

i’m setting the line at April

10y back to 5% with WTI $85… welcome to the new normal

chatted with Politico about the Jensen scandal. my big three takeaways:

1) National security trumps shareholder returns.

Dems are critical of the Trump Administration’s corporate stakes today, but we may see a horseshoe effect. oversight and taxpayer support will be sought by both parties.

2) Jensen is the Fed chair of the AI complex.

I see few benefits to getting rid of him, unless Nvidia decides that “righting the ship” amid headwinds to the AI trade include refocusing the company on its core businesses and away from backstopping all AI-related financing. Removing the “Jensen put” could be costly.

3) Jensen is not just a tech CEO.

He has been a mainstay of political events, abroad and domestically, flanking President Trump with a cadre of CEOs. Dumping him would call into question his presence as well, making this a diplomatic issue.

after the buzzer: what an operation by the MSS. it seems like Jensen may have known; but regardless, really elevates the status of their IC into a serious player.

three hotter-than-expected CPIs in a row
labor market data was super hot
Waller put 50bps on the table

spicy