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Feb 10, 2026
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LONG
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The market is currently pricing in a terminal Fed Funds rate of 3.10%, but the author believes incoming Fed Chair Warsh will cut rates more aggressively, potentially to 2.50% (25bp every quarter). This significant divergence between market pricing and the author's expectation for Warsh's policy implies that the front end of the yield curve is due for a repricing, leading to lower short-term yields and higher bond prices. Position for lower short-term interest rates by going long short-term US Treasuries or related interest rate futures, anticipating more aggressive Fed rate cuts than currently priced. Warsh's actual policy stance differs from expectations; inflation proves more persistent, limiting the Fed's ability to cut rates; unforeseen financial system stress could alter the Fed's path. |
Substack - Fidenza Macro
The end of the bull market or just a pause fo...
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Feb 10, 2026
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SHORT
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The author identifies a secular dollar bear market driven by geopolitical trust erosion, Trump's trade policies, and active de-dollarization efforts by countries like China. Furthermore, incoming Fed Chair Warsh is expected to cut rates more aggressively than the market anticipates (to 2.50% vs. 3.10% terminal rate priced). Aggressive rate cuts by the Fed, combined with ongoing geopolitical pressures on the dollar's reserve status, will exert significant downward pressure on the USD, creating a short opportunity. Bet on a weaker US Dollar against a basket of currencies or specific pairs, anticipating a repricing of Fed rate expectations and continued de-dollarization trends. Warsh does not cut rates as aggressively; other major central banks cut rates even faster; unexpected global risk-off events could temporarily boost safe-haven demand for the USD. |
Substack - Fidenza Macro
The end of the bull market or just a pause fo...
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Feb 10, 2026
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WATCH
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Gold and silver are in a correction phase after a parabolic rise, with the author expecting a period of sideways, choppy price action for "a few months to a year." However, the underlying monetary and geopolitical drivers (dollar bear market, de-dollarization, rising gold share of reserves) remain strongly supportive for a long-term bull market continuation. The current correction offers an opportunity to monitor for signs of equilibrium and accumulation before the next leg up in the secular bull market, similar to the 2006 analog. Monitor gold and silver for signs of bottoming and consolidation within the next 3-12 months, with a view to establishing long positions for a multi-year uptrend. The correction could be deeper or more prolonged than anticipated; Warsh's Fed policy could be less dovish on rates or more hawkish on QT than expected; a significant global economic downturn could temporarily dampen speculative demand for precious metals. |
Substack - Fidenza Macro
The end of the bull market or just a pause fo...
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