沃什鹰派讲话：QT或于2026年底重启

Hey everyone and thanks for jumping back into the macroverse. Today we're going to talk about the most recent speech given by Kevin Worsh at Jacksonhole. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and check out the sale on Into the Cryptoverse Premium at into the cryptoverse.com. As a reminder, the prices for tickets uh for the first ITC conference taking place November 21st, those prices are going to be going up uh in just a few days on September 1st.

So, make sure you get your ticket before then if you would like to go. Link is in the description below or the pinned comment. So, I know like me, many of you dreamed of analyzing the the the the chair of the Federal Reserve speech is at Jackson Hole when you were a little kid, right? We all dreamed of it and and here we are. Uh but it it it's not that surprising, right? I mean he he essentially came out and you know he was quite hawkish talked about how inflation is not really giving him the reads that would make him think like they have it under control and I believe he said something to the effect of he would you know he'd be hardressed to to say that monetary policy is restrictive right now like it's not is is what he was saying and and so because of that it it certainly it certainly led to at least in the short term of repricing of, you know, potential interest rates and like what those probabilities are.

So, we'll talk about that in a little bit, but I I do want to say one other thing before we get into the interest rate stuff, and that is like we keep looking at interest rates and and we talk a lot about interest rates, but and whether they're going to hike, whether they're whether they're going to cut. Um, but there's another tool that the Fed has, and obviously it was a main theme of the last cycle, and I'm sure many of you remember it, probably not so fondly, and that is quantitative tightening or QT.

I think a lot of people just kind of assume that QE has to come back, right? Like it it just has to come back in the short term because that's what they do. But given the technological boom of artificial intelligence and AI and if we are to believe that the AI um bull market continues into into the next year, which I I think it will even with a correction in the back half of the midterm year, if you are to believe that, and one of the reasons I believe that is just simply nothing more than I don't believe the market will top before you get all these major IPOs out of the way.

And I mean Anthropics is probably coming up in the next month or two, but Open AI is probably not until 2027. So if you believe in that that that will continue, then the argument is that could they actually start quantitative tightening once again. So I I think you know if you look at Wars' history, he's already he he's known to to want to reduce the balance sheet of the Fed, right? like that is one of the things he has been known for uh wanting to do in the past.

And he also does not view quantitative tightening necessarily as a substitute for interest rates. Um I I think that you know some people think like oh if if we just do aggressive QT then we don't actually have to raise rates. Now, it is true that you could have a situation where if they were to go through QT, it might eventually lead to outcomes where interest rates don't necessarily have to be as high. But I also think in the short term, Wars basically did what he had to do because if you think back to um the last FOMC meeting, or maybe it wasn't the FOMC, maybe it was some other speech that he gave, but if you listen back to some of his prior speeches, one of the things that he said was that they were going to rely on the long end of the yield curve to to do the work for them rather than necessarily raising rates, right? rather than changing the short end of the yield curve um they would rely on the long end of the yield curve.

But something major happened between when he said that and today and that is that the Treasury Secretary Bessant you know they in they definitely accelerated their bond buyback program. So, and and and the point of that the point of what the Treasury Secretary is trying to do is they're trying to bring down the long end of the yield curve at the same time that the chair of the Federal Reserve is saying, "No, we need to rely on the long end of the yield curve."

So, how can both be true? How can you rely on the long end of the yield curve? like you know one branch or you know one institution but then the other institution comes in and says no we're going to we're going to purposely try to keep long end rates down. Now the problem with the bond buyback program is that it doesn't necessarily solve any of the issues that led to inflation in the first place. It doesn't solve any of them.

In fact, you could argue it's actually inflationary. And so what you might see is you might see the market tests the Fed's resolve or or the the Treasury Secretaries resolve because when when governments intervene in in markets like that, right? When they start intervening, the market has a habit of like testing their resolve constantly and and sort of forcing their hand to see, all right, you'll do that. Well, how far will you go to defend the long end of the old curve?

So I I just want to put this, you know, this like nugget in your brain a and that is QT might be announced in the coming months. I I don't think it's going to be announced in in September. Uh like I don't think it's going to start in September. I don't really think it would start in October. the and I could be wrong, but the earliest I could see quantitative tightening being announced would be December of 2026 because that would be one year after when they suspended it.

And I I I think if they're going to raise rates, they might not want to announce both at the same time, right? Like I don't know that they're going to say, "All right, we're going to raise rates and also we're going to start QT." They might try to stagger that. A more realistic time frame on when QT could start back up would be early 2027. That's probably the base case, but I think there is a case to be made that it actually could start as as soon as December or at least an announcement of it as soon as December.

Now, listen, if they do that, that doesn't mean like that's the nail in the coffin for a potential Bitcoin bull market, right? What it means is that the next bull market in crypto might be similar to the last one where Bitcoin does well and it lifts some of the altcoins up but the majority of the altcoin market just collectively bleeds back to Bitcoin, right? Like there's a case to be made that we just get another one of those just because and and it could be a scenario where the next four-year cycle for Bitcoin, the first part of the cycle is during QT, but maybe the latter part of the cycle is during QE.

That's actually what happened in 2019, right? Like the first part of the cycle was during quantitative tighting and you know they went a little too far. Maybe not, but I mean the pandemic happened and then they had to pivot over to QE. So I I just want you to think about that kind of like in the back of your mind that something similar could happen again. It's possible that they can announce quantitative tightening and and if they do um you know it it could have a similar effect on markets that it had last cycle just kind of running the same playbook once again.

And a lot of people learned their lesson last cycle as to what that means for higher risk assets. And so I I wouldn't be surprised if if that is the outcome where you get a rate hike uh at some point they actually start quantitative tightening back up not because we're you know in a bare market right but because the AI trade is still going on and and this is their way to try to tame inflation because the one thing Kevin Wars does not want to do is allow inflation to run rampant.

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