Core Trueflation (1.3%) running below headline (1.75%), both below Fed's 2% target, indicating consumers are already cutting discretionary spending. Tax refunds only $350 higher YoY vs expected $1000, and that extra money is going into gas tanks, not boosting the economy.

This is a key leading indicator of consumer weakness. The gap between core and headline Trueflation shows the demand destruction is real.

Only 1 in 4 unemployed Americans collects unemployment insurance because benefits cover only 1/3 of living needs (down from 2/3 fifty years ago). Many have moved to gig economy (Uber, Lyft, DoorDash), but high gas prices are eating into their income directly.

This explains why initial jobless claims look benign — the data is misleading. The real labor market stress is hidden.

Agrees with Powell's concern about inflation expectations becoming ingrained, but warns that with wages disinflating and a supply shock, we risk an adverse feedback loop: higher gas prices ? less spending ? more layoffs ? higher unemployment.

This is the core macro thesis: the oil shock is becoming a demand shock, not a lasting supply shock.

Bond market initially priced higher inflation, but a debate broke out (JP Morgan, Goldman Sachs) that this inflation shock could turn into a demand shock. This is why yields reversed and came down — the yield curve is flattening.

The reversal in yields is the market pricing in a growth slowdown, not persistent inflation.

Not an FX expert, but in times of global distress the dollar is treated as safe haven. If the Iran situation is prolonged, the dollar should continue to find support, especially from countries that borrow in dollars.

This is a cautious, conditional view on the dollar.

Hawkish FOMC members will use the oil shock as cover to not cut rates for this administration, claiming it's a lasting supply shock. But it's clearly becoming a demand shock.

Political dynamics are key: the Fed's inaction is partly political, not purely economic.

Yes, absolutely. Real interest rates adjusted for Trueflation are prohibitively high. We've had 13 consecutive months of downward revisions to employment data — unprecedented, even worse than the Great Recession. 2025 saw actual job destruction, not zero job creation. Macro Edge tracking 100,000+ job cut announcements for March. The Fed is falling behind on its labor mandate.

This is the strongest bearish call on the labor market. The data is worse than headline numbers suggest.

Possible if we go to zero bound, but credit standards are tightening (auto loans, credit cards), not loosening. Banks are still realizing losses on consumer loans. It takes two to tango.

Credit conditions are a constraint — even if the Fed cuts, banks may not lend.

It is critical when Warsh takes office because Powell has no incentive to help this administration before midterms. Warsh would be more dovish. 5-year inflation expectations via swaps have fallen significantly, so any central banker would see that.

Political timing matters: Powell's independence means he won't cut rates to help the administration, but Warsh might.

Layoffs increasing ? paychecks shrinking ? less spending ? people think the oil shock is transitory. But if oil stays high, there's even less to spend on everything else.

The market is pricing in a demand-driven disinflation, not a supply-driven inflation.

Yes, especially with stubbornly high mortgage rates. Record number of sellers outnumbering buyers (Redfin data) indicates a buyer's strike. Home prices haven't fallen enough. This feeds back into companies controlling labor costs.

Housing is the biggest consumer purchase — a strike there has broad ripple effects.

Need clarity on business backdrop and signs that Washington (Fed, administration, Congress) has the best interests of corporate America at heart. Until then, companies will continue hiring freezes or layoffs. More layoffs will happen unless something dramatic changes.

Policy uncertainty is paralyzing corporate decision-making.

AI as a reason for layoffs is becoming a red herring. Companies are right-sizing after pandemic over-hiring. Risk is they go too far. The energy shock is squeezing margins again (like tariffs did), forcing another layer of cost cuts.

Margin pressure from input costs (energy, fertilizer) will lead to more layoffs, not less.

The Fed has needed to leave fiscal policy to Congress for a long time. Since 2008, the Fed cuts to zero bound every crisis, encouraging more debt. The specter of servicing $2 trillion in annual interest by 2036 is one of the few governors on fiscal spending.

The Fed's crisis response has enabled fiscal irresponsibility.

Servicing debt is inefficient — it precludes investment in growth opportunities like vocational training. When fiscal house is in order, these things are possible; when not, all revenue goes to debt service.

Crowding out of productive investment is the real cost of high debt.

Investors are looking for safe harbors: dividend-paying stocks over growth stocks (Mag 7). Largest inflows to dividend stocks in recent flows data. Investors want income streams plus truly safe assets that still throw off decent yields in a higher-for-longer regime.

This is a defensive rotation out of growth and into income.

Yes, evidence is in credit default swaps — cost to insure against big AI companies defaulting is rising. This makes funding more expensive. The Nasdaq correction reflects this skepticism. A year ago, bond offerings were oversubscribed; now there's much more skepticism as cash flows crash.

The AI trade is unwinding as funding conditions tighten.

Not over until clouds of uncertainty clear. No functionality in Washington, households on their knees, layoffs unabated, heading into midterms with disgruntled voters.

The macro backdrop remains deeply negative for risk assets.

Energy has been a safe place, even before the war. Energy stocks pay dividends (e.g., Chevron never cut its dividend). But even oil companies say prices can become prohibitively high. Precious metals found a floor last Friday and are getting bid up again. Short-end yields came down Friday, presaging today's move. Support for precious metals is building.

Energy and precious metals are the two safe havens in this environment.

Focusing on the end of the restocking cycle — a bump in industrial activity that is fading, likely going back into the long-standing industrial recession. Also following the bankruptcy cycle and private credit for systemic risk.

The industrial recession is not over; the restocking bump was temporary.

Hard to say, but private credit has funded buy-now-pay-later and other racy household debt. There is a conduit back to conventional banks through non-depository lending. Should not be shrugged off as non-systemic.

The connection between non-banks and banks is the potential systemic link.

Will speak about the Fed, monetary policy, interest rates, and the macro economy — all the things in her wheelhouse.