Interesting TACs of the Week (July 21 – July 27, 2025) – Pres. Trump Visit to Fed; Eigen vs. Rieder

 

Summary – A top-down review of interesting calls and comments made last week in Treasuries, monetary policy, economics, stocks, bonds & commodities. TAC is our acronym for Tweets, Articles, & Clips – our basic inputs for this article.

Editor’s Note: In this series of articles, we include important or interesting Tweets, Articles, Video Clips with our comments. This is an article that expresses our personal opinions about comments made on Television, Tweeter, and in Print. It is NOT intended to provide any investment advice of any type whatsoever. No one should base any investing decisions or conclusions based on anything written in or inferred from this article. Macro Viewpoints & its affiliates expressly disclaim all liability in respect to actions taken based on any or all of the information in this article. Investing is a serious matter and all investment decisions should only be taken after a detailed discussion with your investment advisor and should be subject to your objectives, suitability requirements and risk tolerance.

 

1.USA-EU trade deal; Wowzer!!!

Did Japan come in with $550 billion? EU beat Japan by coming in with $600 Billion in investments in the US on top of existing investments and 15% baseline tariff. President Trump called it the biggest deal ever made. 

 

2. New Highs Ahead in S&P; New Highs ahead in Russell by August 15?

How would the market celebrate this? Perhaps by following Craig Johnson’s call on Wednesday, July 23 on CNBC Power Lunch. What does the clip say?

• we have broken out to all-time highs… trend of this market is still higher; … on target to get to 6,600 by year-end, probably sooner; 
• you have 20%- 25% fewer stocks; big share buybacks; more money chasing fewer number of stocks; market’s just got to go up;
• housing stocks – stocks like DR Horton, Lennar – they all look very similar; building stocks like BLD, BLDR very similar, reversing multi-month. multi-quarter down patterns
• copper is breaking out to all time highs; meaningful pickup in industrials

With all the above, why do we think CNBC screwed up as usual? Look what the above clip omitted to show by cutting off too soon:

• 10-yr Treasury yield forecast 3.5% by year-end from 4.39% on Friday July 27;
• best charts are small-cap & mid-cap;
• Russell can make a new high by August 15; S&P to 6,600 by October 15

Why would CNBC delete these 3 points from their clip above? Isn’t Craig’s forecast of 10-yr yield at 3.5% germane to his calls on Housing & Building stocks? And isn’t Russell making a new high in next 3 weeks (August 15) an important message to viewers? 

Did Brian-Kelly elect to delete these calls or is there a CNBC AI or A-Not-I humanoid or something that deletes these calls either because they hate viewers or because they are trying to limit clip-duration? We are just simple folks with simple minds. And frankly, we just don’t get these CNBC A-Not-I intermediaries.

PS: Look up the track record of Craig Johnson when he comes up with these over-the-top sounding bullish calls. He has been more right than wrong, if memory serves us correctly. 

Interestingly, the above calls by Craig Johnson seem like fodder to the questions raised in JPM’s Bill Eigen in Section 3 below about whether these bullish times are the right times for rate cuts by the Fed. Be wary that Mr. Eigen does see “shades of 2007” as he put it.

After you go thru Mr. Eigen’s views, move to Section 4 below to read views of BlackRock’s Rick Rieder who argues just the opposite. 

How can two highly experienced & smart managers look at the US economy in two so-different ways? Simple – Eigen tends to view things in the old way, viewing the US economy from a goods-economy perspective while Rieder focuses on the US economy from a service-sector view. This is why Rieder recommends lowering interest rates as a way to reduce inflation while Eigen thinks it is semi-nuts to lower rates given the froth he sees.

By the way, Rieder’s views are similar to & supportive of the views-plans of President Trump & Treasury Secretary Bessent while Eigen’s views seem supportive of views expressed so far by Fed Chair Powell. But analyzing views of Eigen vs. Rieder might prove less emotional than discussing opposing views of Trump-Bessent vs. Powell. 

 

3. Must Watch Clip that presents the Powell+ side & “shades of 2007” 

We all see the enormous pressure that is being put on Fed Chair Powell to cut rates, not merely small cuts but in big numbers. Watch & hear Bill Eigen, JPMorgan Asset Management CIO of absolute return fixed income, ask “is that consistent with a massive rate cutting cycle?“

Before we get into the details of the clip, allow us to express our thanks & sincere appreciation to CNBC’s Becky Quick & Andrew Ross Sorkin for letting Mr. Eigen speak freely & in detail. We don’t think any other show on CNBC would have handled this discussion so well.  Trust CNBC Squawk Box to step up when it counts the most.

Watch & listen to Mr. Eigen begin:

• ” the position he is in is almost a no-win right now; because the Fed is trying to do the right thing — looking at the inflation pressures … looking at the economy growing 2%-3%; looking at equities at the highs, volatilities at the lows; credit rates at record tights — are rates really that restrictive ? Yet they have the Administration pounding on them to cut rates? I ask you when do you really engage in a rate-cutting cycle? usually the economy is cratering;.. rates are pushing higher!”

He added,

• “Fed continues to print & they have a $7 trillion balance sheet; you have $37 trillion in debt, a $2 trillion deficit … I mean the fiscal side is really tough; … wages are sticky & moving up – pipe-fitters, electricians, roofing – So I don’t see these inflation pressures dying away; … every one wants to go back to those zero-rates … that’s what fixed income investors need to realize ”   (minute 2:58)

https://www.cnbc.com/video/2025/07/25/zero-rates-are-not-walking-through-that-door-anytime-soon-says-jpmorgans-bill-eigen.html?&qsearchterm=squawk%20box

So what investors do now? Mr. Eigen said at minute 4:20:

• “… the way people are going about in their fixed income portfolios is wrong; .. you should not be buying investment grade credit & high-yield credit at the tightest spreads you have ever seen; because that’s just interest rates … you should be looking at dividend paying stocks; telecom utilities …. you can get a 6%-7% dividend … ” 

Allow us to sidetrack a bit & point out the above clip out just 2 days after BlackRock’s Rick Rieder said on CNBC Closing Bell that “credit is in the best shape that I’ve ever seen“

At this point, Sorkin steps in and asks – “what do you think of private credit funds right now?“

Mr. Eigen said (minute 4:51):

• “Boy, you know what? I am getting shadows of 2007 a little bit; not the extent of back then but the thing that I am nervous about there is a big push to put assets in mutual funds & ETFs and things like that ; things that trade by appointment & putting them with things that trade in seconds & whenever ; when I start to see things like that I personally get a little bit nervous; I am not saying private credit is bad at all; that’s not what I am saying; .. this huge push to take illiquid assets & put them with liquid assets – some of these things trade by appointment; there is a lot of private credit out there that should not be trading at par-value but that’s where it is marked …”

He added ( a la 2007):

• “So I think you have to be very careful about that …. makes me nervous when I see that … you know what happened … back in the day with ABX index & taking illiquid mortgages & putting them with liquid vehicles & the rest in history“

Andrew Ross Sorkin – that’s scary

Mr. Eigen continued:

• “I am not trying to scare people, I am not a bear on private credit trying to scare people; I am not a bear on private credit; some parts of it are resilient; other parts make me nervous … what I am seeing recently gets me nervous … what I have seen last week is unbelievable … it tells me that investors are very unafraid right now.. “

Then he went back to his starting theme:

• “… you look at all these factors – stocks at the highs; meme stocks; credit spreads being extremely tight; volatility at the lows; is that consistent with a massive rate cutting cycle? … the thing that is a little annoying is that when you hear people calling for, demanding rate cuts – what’s their primary rationale? We have too much debt … our interest costs are too high ..” 

At this point Becky Quick stepped in with the perfect question – “are you hesitant about investing?“

Mr. Eigen answered:

• “no; on the Risk side, I think, there is momentum that can continue because everything coming out of this Administration is favorable for risk ; I am not saying you can’t have a shock … I am holding quite a bit of liquidity right now because I am not going to buy things like high-yield at these incredibly tight spreads; I will wait like in April; we got a few opportunities to buy converts, high-yield – we did it with about 10% of the fund; Now we are getting rid of that stuff because it is too expensive … the overall risk environment right now I do think is favorable.. I do think it is susceptible to shock … the higher you go the less of a catalyst you need to have a serious correction & that’s the thing you have to be careful about… but I will say earnings are good coming out of this Administration; but those that are favorable for equities are not favorable for fixed-income … with short end at 4%-5%, why take the risk on the 10-year at 4.40% when you can get that much in money-markets especially with the fiscal situation we have … “ 

 

4. Clearing the “shadows of 2007”

We remember the July-October period of 2007 somewhat well. As Mr. Eigen said, the ABX index & the S&P rally into August was special & extremely frustrating to the David Rosenberg et als as we recall. Then came the disappointing July labor report in the first week of August. As the rally seemed to give way, Fed Chair Bernanke cut the Discount Rate by 50 bps on August 17, 2007. If you focus the Aug-Dec 2007 chart below, you can’t miss the vertical up move. 

Fast forward to September 18, 2007 – the day Bernanke cut the Federal Funds rate by 50 bps from 5.25% to 4.75%. You can see the up candle on that day and how the enthusiasm of that rate cut took the S&P to a new all time high in October. Then,  

• “In October 2007, Ben Bernanke, as the Federal Reserve Chairman, cut interest rates (by 25 bps to 4.5%) on October 31st. This was the second rate cut in two months, aimed at addressing the disruptions in mortgage markets and preventing them from impacting the broader economy. The move came after the Federal Open Market Committee (FOMC) met on October 30-31. “

That did not have a positive effect in November 2007. On December 11, 2007, Bernanke cut rates again by 25 bps to 4.25% with minor effect. 

So let’s move to early 2008:

On January 22, 2008, Bernanke cut rates by 75 bps to 3.50%. You can see the impact above until mid-March 2008. Bernanke cut rates again by 75 bps to 2.25% on March 18, 2008. As the magic wore off somewhat, Bernanke cut rates by 25 bps in April 2008. 

Surely that would be enough. Bernanke had already cut 325 bps in Fed Funds rate from 5.25% in early September to 2% in April 2008. Surely that would be enough. Sadly the underlying conditions, illiquidity & balance sheet crisis kept getting worse. Fannie May & Freddie Mac were placed into conservatorship on September 7, 2008. Still Bernanke did not act. Eight days later on September 15, Lehman collapsed.

As we recall, Paulson & Bernanke were both still afflicted by the Volcker regimen – stay firm – don’t cut rates before their time. What a disaster! Rates were no longer critical. It was TARP time.

The Wave method says that big economic moves are neither discrete nor do they occur in steps that you can react to. When economies move, they move in wave patterns. And following the waves does NOT save you. You keep following the down wave & sink. The ONLY way to save yourselves is to lead the fall in waves with powerful liquidity to prevent the waves from getting bigger and that, in economic terms, means add rate cuts & liquidity ahead of the next dip in growth. This is 100% anti-Volckerist. 

Had Bernanke fought with same anti-Volckerist vigor to save Fannie Mae & Freddie Mac, that he showed post-Lehman, it might have forestalled the Lehman disaster. As we recall, a mere $20 billion would have given Lehman a lease on life in September 2008. 

The point is Nobody KNEW in July 2007 what lay ahead. But everyone in authority knew there was serious trouble brewing. But to act before the problem became a crisis was totally against the Volckerist-manhood that every Fed has embraced & lived by since then.

 

5. Huge Difference between 2008 & 2025; Rick Rieder vs. Bill Eigen 

The economic conditions in 2007-2008 & 2025 are similar. The stock market economy doing well; Global growth fine; stock market rallying. And the only issue that seemed negative was mortgages related to housing. The feeling of being in control & making money in 2007 was not that different with the happy & buy in rally we see today. And as 2007-2008 progressed, housing became a big issue as it is doing now in 2025.

2008 was the final year of the second term of President George W. Bush. And President Bush didn’t have a real interest, let alone a determined focus, in Senator McCain’s candidacy. So there wasn’t determined Presidential focus on the housing-mortgage problem. Despite the signs of a housing downturn in mid-2006, Bernanke opted to simply pause interest rate hikes. It was deemed unnecessary & even a sort of weak resolve to even consider lowering rates. And there was no pressure on Bernanke or Paulson to begin cutting rates.

In contrast to President Bush & Hank Paulson in 2007 , President Trump and Secretary Bessent are totally focused on the housing affordability crisis we face today. And they understand a basic reality that Mr. Eigen’s statements in Section 1 above show he does not.

First Eigen thinks lowering rates in this period of would raise inflation levels & he thinks stocks going up means interest rates should rise to curb that excess. Frankly, that is the trouble with many like Bill Eigen who are wedded to old models & unaware of how rates & new growth work together. He doesn’t get how the economy has changed from being dependent on import of low-priced goods from China to today’s non-interest rate dependent service sector growth.

That is where Rick Rieder of BlackRock comes in with his wisdom & experience: 

• “the service sector is what drives the economy today… most of what drives the economy is resilient to a slow-down in goods; …. in all financial assets, there is an extraordinary amount of cash; it has to flow somewhere; companies are buying back their stock; … I think there is something different at play in terms of inflation; what’s going to happen in terms of productivity & innovation is that inflation is going to come down … “

Then Rieder addressed the housing market:

• ” today if you look at the housing market; …the people that borrow today are lower-income and they are adversely impacted by where interest rates are; … if we can get interest rates down, we can actually bring home prices down; you build more houses, you actually reduce inflation; I think it is quite consistent to bring the interest rate down even in the economy that is operating at a pretty good level. “
• “inflation breakevens today are 2.5% – 2.75%; so even if you bring the Fed Funds rate down to 3.25%, you are still above the rate of inflation; So I think you have got plenty of room to drop )the funds rate) even though the economy is operating well. “

PS: Allow us to agree & add that is why we set Macro-Viewpoints Over Night Rate at 3.75%, about 60 bps BELOW the Fed Funds rate And we are now looking to reduce it once we see the signs we expect to see. 

The other concern of Bill Eigen was the level of the debt leverage in the US economy. Rieder’s view & solution is:

• “there is only one way to de-lever the economy; you have got to out-run the debt; you have to outgrow it; so there is a plausible outcome where you get nominal GDP running at 4.5%-5%; if you get the interest rate down to 3%, then you can start to de-lever but it takes a really long period of time… The one engine today is higher growth; as long as we can grow, then you can work thru it“

And that means. Herr Powell, Cut the Federal Funds Rate to stimulate growth. 

We think Rick Rieder is right but what is far more important is that both President Trump & Secretary Bessent think he is right. 

By the way, Rieder’s concept of out-running the Debt with growth is similar to our analogy of wave economics which suggests you lead the falling wave with liquidity, meaning in economic terms, adding rate cuts & liquidity ahead on the next dip in growth.

If you get this, you will see why President Trump is urging the Fed to lower interest rates faster & ahead of a slowdown instead of the traditional method that the Paulson-Bernanke Fed used in 2008. 

 

6. President Trump’s Visit to the Fed & Fed’s “independence”

President Trump’s visit to the Fed was vintage Trump in our opinion. He was gentle but firm in what he wanted. He gave enough respect to Chair Powell but with the air of the nation’s Premier & Only Chief Executive. His most important signal was the primacy of US Housing Affordability over all other issues the Fed might consider. He told us that the Fed had promised to lower rates soon & that he accepted that as enough for now.

Much will depend on this coming week’s employment number & the state of the labor economy. A weakness in labor would add substantially to the heavy weight of housing costs on the American worker, householder & parent. No other issue is as important to the average wage-earner than housing costs & affordability. As long as the Fed moves to cut rates & help the average American family, Powell would remain acceptable to President Trump.

Those who obsess over the myths of Fed independence need to understand the new reality. The greatest threat to Fed’s Independence is not from President Trump but from the left-wing Democratic base which is moving closer to Bernie Sanders, Elizabeth Warren, AOC & their new hero on the horizon Zofran Mamdani.  Their thinking is clear – the means of delivering to lower-income Americans & needy middle-class Americans is greater CONTROL over the resources the Fed has. 

People should remember that the Fed is a product of the US Congress & Jay Powell confirmed this vocally in the earlier weeks of the Trump Presidency. One can see that the House is already losing patience with Jay Powell if not its confidence. Look what President Trump has accomplished in getting his critical bills passed by the Congress. And none of them had the existential risks to the Republican control of House & Senate that housing affordability has. Once the House loses faith in Powell’s ability to turn housing around, they would be more amenable to changing the law to remove Chair Powell. 

Actually we think the Congress might choose a via media by first passing a bill that allows the President to declare an Economic Emergency or a Housing Emergency and, upon such declaration, transfers the control of the Fed to the Secretary of Treasury for a period of 6 months renewable for another 6 months. This short-term control will be much easier to accept & pass. It will enable the House & Senate members to tell their constituents that they are focused on the most important issue faced by the American people.

And it will consolidate the monetary powers of the USA into the hands of the team of Secretary Bessent, Kevin Warsh & Kevin Hassett & their team for a period of 6 months. This will, for example, enable the Treasury to cut the Fed Funds Rate to a small figure & simultaneously enable the Treasury to practice Yield Control at the longer end.  

This will also enable Secretary Bessent, with President’s approval, to reduce the Fed structure & costs by over 50% at least, first by cutting the Ph.D. staff at the Fed to about 100 from the current 400+. In addition, the Secretary can make the Fed smarter by adding critical money skills & experience while removing the near monopoly of paper-trained economists who haven’t actually done anything.

We would recommend adding significant diversity & financial markets expertise to the Fed Board of Governors.

1. Our first choice for a modern Fed Governor would be Rick Rieder of BlackRock or equivalent. There is no expertise today at the Fed in US Equities & the emergence of a class of huge companies that are self-funding. A Rick Rieder type Fed Governor would add immense value to the Fed Chair & the Fed Board & the Secretary of the Treasury.
2. Our second choice would be Dr. Lacey Hunt of Hoisington, the nation’s premier expert in 30-year Treasury Bonds & Zeros. We don’t believe there is any one at the Fed today with experience in valuing/trading long duration Treasuries. 

We seriously think that the Volckerism at the Fed is unlikely to be sustained. In fact, it is likely that in the next decade, Jay Powell might be viewed as wrong & dangerous as Arthur Burns is viewed today. We think, going forward, the Alan Greenspan culture would become the norm at the Fed, a culture of working with the Treasury to jointly guide monetary policy.

All the above is secondary to beginning the new rate cutting cycle at & by the Fed.

 

7. CNBC – A network of two contrasting extremes

We began this article with what we think is the best part of CNBC, the part that excels when calm, thoughtful analysis & questioning is needed. How Andrew Ross Sorkin & Becky Quick performed in speaking with Bill Eigen of JPMorgan was superb for viewers like us who want to listen while guided by smart questions from CNBC hosts. 

At the other extreme this week, was the treatment Scott Wapner of CNBC Closing Bell meted out to Professor Jeremy Siegel of Wharton. Recall that Professor Siegel had earlier suggested on CNBC’s air that Chair Powell should resign to protect Fed’s independence.

Scott Wapner reportedly returned from a 2-3 week vacation this week to resume his duties as the Host of CNBC Closing Bell. Unlike most people who return from a vacation happy & refreshed, Mr. Wapner returned to CNBC Closing Bell in what we sensed was an intensely angry mood.  

Based on our scribbled notes, Mr. Wapner said “a President doesn’t like the Fed Chair” and asked “what kind of a precedent that sets?” First “a President” vs. “The Fed Chair“?? The President of the United States is elected by the people of the USA in an open election and The President is the Chief Executive of America with powers that exceed that of any other American. On the other hand, a Fed Chair is appointed by the President for a specific term and has a limited portfolio of action. And such Fed Chair, as we understand, reports to the Congress & can be removed by the Congress. 

Think of examples of where you would use “a” for an elected leader vs. “the” for a non-elected leader. One example is using “a Prime Minister of UK” vs. “The King of England”.  or “a Prime Minister or President of Iran” vs. “The Ayatollah” of Iran. Or in a non-executive sense, you could say “a Prime Minister of Italy” vs. The Pope. 

To the best of our knowledge, none of the attributes of the King of England, The Ayatollah of Iran or the Pope are attributable to Fed Chair Powell. So Mr. Wapner’s relative description of President Trump & Fed Chair Powell seems outrageous &, we hope, against any & all CNBC policies, assuming CNBC has any.

Then Mr, Wapner said to the highly respected Professor Siegel that “you don’t like what he is doing … that means he is doing his job well“. Hmmm! We thought this was outrageous & a direct insult to Prof. Siegel’s  accomplishments & insights.

The above comments are what we scribbled on paper as we watched in amazement. So we ask CNBC to publish the entire conversation between Professor Siegel & CNBC Host Wapner either on CNBC.com or on YouTube. We don’t know what got into Mr. Wapner upon his return from vacation. But whatever it was, his behavior on air with a highly respected Professor Emeritus of Wharton should be deemed intolerable by CNBC.

On a much lower scale of emotion, Mr. Wapner said on Friday to Mohammed El-Erian, another highly respected guest, about the Trump vs. Powell issue “they call me the Judge” and that means I decide or words to that effect.

That was more funny than crazy since the “judge” character used to term Wapner as “Judge” is Judge Wapner of Animal Farm, a comedy. We don’t know much about Judge Wapner of Animal Court but we can say the Judge Wapner of Animal Court has an engaging smile than CNBC Host Wapner should try to imitate. 

On a different subject, specifically about omissions in CNBC clips that might deliver misinformation to CNBC viewers, take a look at the clip below from CNBC Closing Bell on Tuesday, July 22. It if of Rick Rieder titled “Credit is in the best shape I’ve ever seen in my career“.

The clip as shown is accurate & excellent. And it ends on a high bullish note with Rick Rieder extolling credit at the end. 

Our issue with this clip is NOT about what the clip shows but about the above clip omits from what Rick Rieder said after what is shown. Our scibbled notes show that Rieder began speaking about the U.S. housing market pointing out that biggest influence of rates in on the housing market. He added “hsg starts, building permits  … all at lows of 40-50 years“. 

In other words, CNBC Closing Bell kept the very bullish comments of Mr. Rieder in its posted clip but deleted all the bearish & negative comments about state of housing from the above clip. Is that honest we ask? We watched the show in real time & that’s the only reason we have some idea of what Mr. Rieder said about US housing. We did send a message to CNBC Closing Bell requesting information about Mr. Rieder’s views:

Needless to say neither @CNBCClosingBell nor @CNBC have responded to our request. 

We wonder if there is any consequence to CNBC for only posting bullish comments about investing in their posted clips while deleting all bearish comments? As importantly, should Mr. Rieder and/or his employer BlackRock care about Mr. Rieder’s partial set of comments ending up causing financial loss to viewers? One would think BlackRock should insist that the clips posted by CNBC about statements by BlackRock’s employees should be complete & unedited to avoid misinforming viewers.

And to remember that CNBC Closing Bell used to be hosted by Maria Bartiromo, one of the finest & honest hosts in Financial TV! Reminds us of Shakespeare’s phrase “what was fall was there my countrymen!” We think that celebrated phrase applies to CNBC Closing Bell simply by replacing “my countrymen” by “my fellow CNBC Closing Bell viewers”!

 

 

 

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