Fed, Iran deal, and market outlook (with Paul Allen)

Ethan Devitt expects the Fed under Kevin Warsh to be less transparent, creating market volatility. The Iran deal will lower oil prices but not solve sticky services/food inflation. He sees dip-buying opportunities in energy (AI demand), views SpaceX as speculative but not peaked, and recommends gold as a small portfolio hedge against fiscal concerns.

implicit

RUT

explicit

USD

Global Wealth Management Firm 4.2
Wealth Manager
Ethan Devitt 7.5

Fed, Iran deal, and market outlook (with Paul Allen)

metals

Gold case remains: debasement concerns and global fiscal budget issues unresolved... as a small hedge it stabilizes portfolios

ndx

Devitt sees AI/tech demand as structural (data centers, energy needs) and SpaceX not peaked, but warns of speculative froth and downside volatility from lockups.

wti

The oil price drop from the deal will help bring US inflation below 4%

yields

Devitt says Treasuries have rallied but yields hit technical resistance at 50-day MA; fiscal budget problems unresolved, so yields are rangebound near term.

Paul Allen

Asks about Kevin Warsh's first Fed meeting and what to listen for regarding policy language.
Ethan Devitt

Warsh may be less transparent than Powell, creating a vacuum for markets used to regular telegraphing. He inherited higher inflation with pressure for rate cuts, making his communication style critical.
Paul Allen

Asks if markets could see caution or swings given Warsh's unknown communication style and potential shift in neutral rate.
Ethan Devitt

Volume of commentary will be key; Warsh's independence vs. yielding to pressure will determine market reaction. Swings are likely.
Paul Allen

Asks about moving from private credit to traditional fixed income given yield premiums.
Ethan Devitt

Traditional fixed income is unattractive at entry point due to fiscal budget concerns. Private credit, if diversified away from software/AI concentration, still looks interesting.
Paul Allen

Asks if the Iran MOU reopening the Strait of Hormuz will reduce inflationary pressures globally.
Ethan Devitt

The oil price drop from the deal will help bring US inflation below 4%, but services and food inflation remain sticky. Markets have become somewhat immune to geopolitical news.
Paul Allen

Asks about Fed trajectory after RBA pause and whether the Fed will look through short-term noise.
Ethan Devitt

Fed will look through the Strait reopening as transitory. Inflation is still misbehaving; a rate hike now would be a counter-indicator markets cannot digest.
Paul Allen

Asks about energy complex: dip-buying opportunity or falling knife given selling in Woodside, Inpex, S-Oil.
Ethan Devitt

Dip-buying opportunity: AI and data center demand create massive energy needs from all sources. Grid investment is underinvested globally. Long-term energy is a good way to play AI sustainably.
Paul Allen

Asks if SpaceX IPO is start of a supercycle or peak of tech mania.
Ethan Devitt

SpaceX is not peaked yet; forced demand from index purchasers and hot money drove 50% of flows on day one. Attention has shifted from negative AI sentiment.
Paul Allen

Asks how SpaceX will perform going forward, like Tesla or differently.
Ethan Devitt

SpaceX is unprecedented in multiples and financial engineering; technicals dominate. Continued upward pressure but downside volatility likely when lockups expire and supply meets demand. Highly speculative.
Paul Allen

Asks about gold: still a case for owning it despite losing ground, up 28% on the year.
Ethan Devitt

Gold case remains: debasement concerns and global fiscal budget issues unresolved. Retail buying has pulled back, but as a small hedge (=5%) it stabilizes portfolios against ongoing volatility.

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