Whalen: Bond Market Already Hiked, Double-Digit Inflation Still Ahead, Warsh Sets New Tone at Fed

Summary

Chris Whalen argues the bond market has already tightened, driving a rotation from equities to defensive bonds and high-yield REITs. He sold most AI stocks, holds SpaceX, and is accumulating gold, silver, and copper after recent sell-offs. He warns of double-digit inflation ahead with no Fed cuts, while private credit risks mount.

• Chris Whalen sees Kevin Warsh's less-is-more Fed approach as positive, likely removing dot plot and forward guidance.
• The bond market has already tightened, effectively hiking rates and triggering a record rebalancing from equities to bonds.
• Whalen has sold most AI stocks except a SpaceX holding, citing an AI bubble and Bitcoin spiral.
• He is accumulating gold and silver on price weakness, viewing them as medium-to-long-term buys.
• Copper is also held via ETF as a supply-demand trade.
• He holds mortgage REITs Annaly and PennyMac for high yields backed by government-insured assets.
• Double-digit inflation remains his forecast, with no Fed rate cuts coming.
• Private credit risks are festering, with distressed debt exchanges rising among private equity-backed companies.