Asks if President Trump's talk about European allies is turning into something markets should be concerned about.
Tim Stenovec
Bob Michele
It feels very chaotic again, similar to the panic in April last year. The situation with Greenland and Japan has markets worried about financing and tariffs.
Asks if this is short-term noise or something that will stick and impact the investment landscape longer.
Carol Massar
Bob Michele
It's hard to know; would have preferred to hear policy details instead of a domestic victory lap before Davos.
Should the president be taking a victory lap based on the past year's performance?
Carol Massar
Bob Michele
Objectively, heading into 2026 with momentum: strong Q4 GDP, inflation down, tariffs providing revenue, markets at highs. That momentum looks set to continue.
Notes the 'Taco Trade' from last year where what the president said didn't necessarily happen. Asks if markets are overreacting.
Tim Stenovec
Bob Michele
Markets are entitled to overreact after low volatility; this is a message to the administration that there's a limit.
Is the bond market 'yippie' now (panicked)?
Tim Stenovec
Bob Michele
Not yet. Japan's bond market is unanchored due to domestic issues, but the US market looks orderly with a normal yield curve steepness.
Is there any real alternative to US debt for foreign holders?
Carol Massar
Bob Michele
No, there is not. Non-US clients looked at alternatives last spring but came back due to the depth, breadth, and confidence in US markets.
Asks about a Danish pension fund citing fiscal discipline and a weaker dollar as reasons to exit US Treasuries. Is that just political?
Tim Stenovec
Bob Michele
Fiscal discipline is a thing of the past globally. Deficits can be financed, and Japan shows you can have 300% debt-to-GDP and life is still good.
When do we pay the piper for global lack of fiscal discipline? Is sovereign debt the next crisis?
Carol Massar
Bob Michele
Doesn't see the rampant, unserviceable leverage that existed in 1929. QE allows sovereign debt to perpetuate.
Who does the bond market have priced in as the next Fed chair?
Tim Stenovec
Bob Michele
Scott Bessent is still his number one pick; thinks the president is stalling and negotiating with him. Rick Rieder would be an excellent, different choice as a practitioner.
Can the next Fed chair be independent?
Carol Massar
Bob Michele
Has never fully believed Fed chairs are independent as they are political appointees, but they try to do the best thing once in office.