Fed Signaling More Cuts Is 'Crazy Town,' Says Lisa Shalett

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00:00How relevant is Fed policy to this rally and valuations at the moment?

00:03I think it's been very, very critical. But to Lisa's point, I think we've baked in what

00:11we can bake in at the moment, knowing what we know. And it's been pretty concretized. I mean,

00:18one of the things we've observed is the extent to which underneath this rally over the last 10

00:23weeks, you've had this really kind of pro-cyclical junkie broadening, right, where you've really

00:31seen small caps lead. You've really seen micro caps lead. And that kind of thing is very much

00:38premised on much lower interest rates. And we're in the camp that says that piece of this trade

00:44may have gone too far. Is there something that we're interpreting maybe a little bit incorrectly

00:50with the broadening out and the rally in asset prices? And John was mentioning earlier this

00:54rally in gold and stocks, this idea that you see haven assets rallying at the same time that you

00:59see risk assets rallying. Is this a sign of inflation percolating through where it can in this question

01:06of dollar debasement on the heels of the Fed set to cut rates regardless of what the inflationary

01:11backdrop really is? Very much so. I mean, this is a case when the everything rally, right, when bonds

01:18are going up, stocks are going up, gold is going up. It tells you that there's still too much liquidity,

01:23you know, sloshing around in the system. And here's the Fed signaling, you know, that they're prepared

01:30to give us another 100 bps in an economy that right now looks like U.S. GDP is, you know, growing at a

01:38real basis at least 3%. I mean, this crazy town.