Alf and Brent discuss the major market shifts since the Warsh press conference. Is this a big macro shift or just a mini-trend that will ultimately slow down or even reverse?

The Rebasement Trade

The Macro Trading Floor

# Full Transcript

**Podcast:** The Macro Trading Floor

## Transcript

[SPEAKER_A] Macro Trading Floor. With me, Alfonso Peccatiello, founder of The Macro Compass and former head of investments at a large European bank.

[SPEAKER_B] And I am Brent Donnelly, president of Spectra Markets. I've been a portfolio manager, day trader, and market maker at the biggest commercial and investment banks in the United States. I'm also the author of Alpha Trader and The Art of Currency Trading. If you want to know what's going on in markets and where they're going, you found the right podcast.

[SPEAKER_A] Hi everybody, and welcome back to The Macro Trading Floor. So happy to be back. Brent is back. Alf is back. How are you guys doing? But how is Brent doing?

[SPEAKER_B] I'm great. I just got back from the OG homeland. So my real homeland is Canada, obviously, but then my homeland homeland is Northern Ireland. That's where my ancestors came from in 1720 or whatever. So I was in Ireland for 2 weeks and man, it was beautiful. It was so good.

[SPEAKER_A] So Brent is relaxed. He came back and the first thing he wrote is, what are you guys doing with this 50 basis point of hikes and now hiking in July? Are you completely out of your mind? Fade. And then he sent the note and then the day after we had a 10 basis point 2-year rally. So Brent, talk to us. What's your secret?

[SPEAKER_B] So it's interesting. This territory has been kind of walked a bit already by a lot of people writing and stuff about the Fed because the Fed was more than a week ago. And so I had some arguments back and forth with people. And you know what it really comes down to, I realized after arguing with or debating with people yesterday, is do you believe Warsh or not? And the fact is I just don't believe him. I think that a new Fed chair coming in with inflation high has to say certain things and he said those things and it absolutely doesn't mean that he means it or that he's going to follow up in real life with real action because it's not like there's a Fed chair that comes in and says, "You know what? We're not that worried about the inflation target." Of course they're going to say that. That's what Powell said all the time too. And then they make a bunch of forecasts that it'll get back to target within 2 years and they don't react to what's going on. And the funny thing is though too is really whether you believe him or not, I feel like there's an irony to the timing of his start because look at where oil is now, it's barely higher than— So if you compare February 25th, 2026 to now, Atlanta Fed GDP now is the same. Crude is up whatever, 3%. Unemployment rate is basically the same. Claims are higher. The only thing that really has changed— Oh, and by the way, 1-year inflation breakevens are lower now than they were before the war. But at that time we had 2 cuts priced. Now we have 1.5 hikes priced. So I feel like the pendulum has gone way too far. And just like when Powell first came ...

The Rebasement Trade

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

The Rebasement Trade

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.