Kevin Muir, veteran trader and publisher of The Macro Tourist newsletter, returns to Forward Guidance to update viewers with his thoughts on the U.S. fiscal deficit, the bond market, and buy-write ETFs. Muir argues that persistently stimulative fiscal policy will keep nominal demand and growth high in the U.S., and that over the next decade, inflation surprises will be consistently to the upside. Muir explains why he is bullish on inflation breakevens and Japanese equities, and shares why he is excited about Harley Bassman’s new mortgage ETF. Filmed on January 9, 2024.

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Timestamps:

(00:00) Introduction

(00:48) U.S. Fiscal Deficits Are Fueling A Boom

(08:54) Are Higher Interest Rates Actually Stimulative To The Economy?

(10:29) Modern Monetary Theory (MMT)

(15:11) Thought Experiment With Bank of Japan

(20:53) Why Kevin Likes The Japanese Stock Market

(24:48) Bond Market and Fed Policy

(33:24) Rates Market Is Overzealous In Pricing In Fed Cuts

(34:10) Floor vs. Corridor System

(42:08) Kevin's 2024 Economic Outlook

(51:14) Using Options To Identify True Market-Assigned Probabilities In The STIR Market

(57:14) Kevin's Favorite Trade: Long Inflation Breakevens

(01:07:36) Interest Rate Vol Is Cheap (And Harley Bassman's New Mortgage ETF)

(01:11:04) Kevin's Thoughts On Buy-Write ETFs

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.