Fed officials showing dissent on rate cuts with Schmidt disagreeing with previous cut and Kashkari on the fence, creating uncertainty about next Fed steps
Host
Colin Martin
Multiple Fed officials advocating for patient approach through 2026, rotation of Fed voters will be interesting with Schmidt having only one more vote this year
Colin Martin
More dissents could result in more Treasury market volatility due to uncertain outlook trajectory
Markets pricing less than 50% chance of December cut - where do you see rates going?
Host
Colin Martin
If no December cut and extended pause beyond market expectations, could lead to upside surprises for Treasury yields especially short-term yields
Credit markets showing concern about hyperscalers taking on more debt with Oracle CDS spreads surging
Host
Colin Martin
Markets priced for perfection with very low spreads leaving little room for improvement and more downside risk
Colin Martin
Risk with tech issuers is whether debt issuance for data centers and growth will translate to stronger cash flows to service debt burden
Colin Martin
Not worried about systemic defaults - risks concentrated in low-rated CCC issuers with poor interest coverage ratios