Cash Is King During Fed's Hawkish Warpath, Says Former $20 Billion Fund Manager
Alfonso "Alf" Peccatiello, author of The Macro Compass and former $20 Billion fund manager, joins Jack Farley to break down yesterday’s action-packed Fed meeting, in which Fed Chair Jay Powell laid out the Fed’s revised framework for moderating the rampant inflation that has beset the U.S. economy. Alf tells Jack why the tightening of financial conditions that the Fed aims for requires a further fall in risk assets, and therefore he expects that cash will perform well. Filmed the morning of June 16, 2022.
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Alfonso Peccatiello’s writings can be found at https://themacrocompass.substack.com/
His most recent piece that he and Jack discuss can found here: https://themacrocompass.substack.com/p/bad-cop-good-cop?s=r#details
The Fed’s June statement: https://www.federalreserve.gov/monetarypolicy/files/monetary20220615a1.pdf
The Fed’s Summary of Economic Projections (SEP): https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20220615.pdf
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(00:00) FOMC Overview
(06:30) Powell - Good Cop or Bad Cop?
(09:40) Inflation Expectations and Terminal Rate
(12:25)Leverage and VaR Shock
(17:08) Can The Fed Actually Control Inflation?
(23:13) The Impact Of Higher Rates On Portfolio Allocation
(29:37) What Does This Mean For Your Portfolio?
(41:43) The Fed's Real Yield Paradigm Shift
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