HAWKISH HOLD HALLUCINATION

Summary

Kevin Muir and Patrick Ceresna discuss the fallout from the latest FOMC meeting, analyzing how the Fed's confusing communication triggered a sharp selloff in the long end of the bond market. They also examine the massive unwinding of the AI and semiconductor momentum trade, comparing the current price action to historical bubble bursts. Finally, they review extreme COT positioning in crude oil, the yen, and treasuries to identify potential short squeezes and structural shifts.

• The Fed's lack of clarity and failure to hike rates caused the long end of the bond market to sell off sharply.
• Semiconductor and memory stocks have suffered a historic momentum crash and are expected to drift lower.
• The KOSPI's recent price action closely mirrors the NASDAQ's dead-cat bounce and rollover in 2000.
• A potential policy shift by Japan's GPIF could create massive, sustained structural demand for the Yen.
• CHF/JPY is highlighted as an excellent proxy trade to hedge against a US stock market decline.
• Record gross short positioning in crude oil futures sets the stage for a massive short squeeze.
• Gold remains supported by structural accumulation from the People's Bank of China despite real rate fluctuations.