DoubleLine PM on Fed credibility and bond market overreaction (with Romaine Bostick; Katie Greifeld)

Noda views Warsh's first meeting as credible and hawkish, with a strong commitment to price stability. He sees the two-year yield spike as an overreaction from speculative longs expecting dovishness, and expects it to settle back. He advocates patience in credit markets due to tight valuations, favoring short-duration and floating-rate securities in a higher-for-longer rate environment.

Yields cautious up , short term, interviewee explicit

explicit

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RUT sideways

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Doubleline 8.5
Asset Manager $130.00B
Kenshin Noda 8.5

DoubleLine PM on Fed credibility and bond market overreaction (with Romaine Bostick; Katie Greifeld)

rut

Noda's focus on credit markets and patience implies a view that risk assets like small caps will not see strong directional moves in a higher-for-longer, tight spread environment.

yields

I think a little bit of an overreaction on the two-year. I think the two-year is probably a bit of a buy here. I wouldn't be surprised if you see that settle back down another 10 basis points or so closer to 4%.

13 calls

+2

no reliable edge (random outcomes)

5/8/2026 9:39:28 AM	medium term up	21 days later	+1.47%	+1.47%
5/8/2026 1:20:20 AM	medium term up	21 days later	+1.47%	+1.47%
5/8/2026 1:20:20 AM	medium term up	21 days later	+1.47%	+1.47%
5/8/2026 12:39:36 AM	medium term up	21 days later	+1.47%	+1.47%
5/8/2026 12:33:19 AM	medium term up	21 days later	+1.47%	+1.47%
5/7/2026 10:50:16 PM	medium term cautious up	20 days later	+2.09%	+1.04%
3/23/2026 10:31:11 PM	short term up	6 days later	-1.14%	-1.14%
3/19/2026 12:11:26 AM	short term cautious up	5 days later	-1.43%	-0.72%
12/10/2025 11:31:27 PM	medium term up	20 days later	+0.53%	+0.53%
12/10/2025 11:14:38 PM	medium term up	20 days later	+0.53%	+0.53%
10/29/2025 10:16:46 PM	medium term cautious down	20 days later	+0.98%	-0.49%
9/22/2025 6:00:06 PM	long term sharp up	62 days later	-1.99%	-2.99%
9/18/2025 12:05:31 AM	short term cautious up	5 days later	+0.19%	+0.10%

Show all 13 yields results

Asks Noda for his assessment of Kevin Warsh's first press conference as Fed Chair, noting the market's focus on his performance.

Romaine Bostick
Kenshin Noda

Warsh did a good job, bringing credibility to the Fed. He emphasized price stability as paramount. He is not a fan of the SEP dots or forward guidance, and has opened himself up to review via consultant groups.

He mentioned multiple times price stability is of utmost importance. He's got some changes he wants to make.
Asks if the Fed can do anything over the next few meetings given the situation in Iran and inflationary pressures.

Romaine Bostick
Kenshin Noda

The Fed can act but is unlikely to cut due to inflation pressures. They will stay patient. The two-year yield move is an overreaction from speculative longs expecting dovishness; it's a buy here and could settle back 10 bps closer to 4%.

I think a little bit of overreaction on the two-year. I bet there was a lot of speculative longs thinking he's going to be more dovish than he was.
Asks what 'patient' means for credit markets coming out of the decision.

Katie Greifeld
Kenshin Noda

Patience is based on valuations. Credit spreads have tightened back to their tights of the year. As a credit investor, it's time to be patient, focus on bond selection, and avoid potential hiccups.

The risk-on of equity markets has been great for credit markets.
Asks what the playbook looks like for bond markets in a higher-ish rate environment.

Katie Greifeld
Kenshin Noda

Higher but stable can be good for credit markets. Fundamentals are strong. Higher for longer means floating rate securities offer attractive extra yield. He favors the front end of the curve with a mix of floating and short-term fixed rate securities, taking some investment grade credit risk for 5.5-6% yields.

We can stay in this uncomfortably tight spread environment for some time.
Asks about the balance sheet commentary and its direction.

Romaine Bostick
Kenshin Noda

The Fed will stay accommodative on liquidity and help repo markets. Warsh is not a fan of big balance sheets but is biding his time with consulting teams. Balance sheet approach likely towards end of year if inflation comes down.
Asks which of the five task forces is most urgent.

Katie Greifeld
Kenshin Noda

Communication is the first to be addressed. Warsh doesn't like forward guidance. Press conferences will likely be shorter. Balance sheet takes a back burner until end of year.

I think it was already shorter this time than Powell's usual conferences.
Asks how comfortable he is with a scale back in communication.

Romaine Bostick
Kenshin Noda

Forward guidance was important during QE but not needed now with low unemployment and no QE. The Fed should be more nimble and not follow backward-looking dots. It's a step in the right direction.

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