Christopher Waller

When asked about "headlines about another fund... struggling to meet redemptions," Waller responds: "I don't see big, really big widespread problems... couple of cases of certainly fraud... I don't think as a whole the private credit market is in any serious trouble." The market currently fears a systemic liquidity crisis in Private Credit (the "shadow banking bubble" narrative). Waller, a key regulator, explicitly isolates these issues as "fraud" rather than systemic failure. This greenlights the major, high-quality asset managers (Blackstone, KKR, Apollo) to continue gaining market share as fears of a regulatory crackdown or sector-wide collapse dissipate. LONG. The "Fed Put" effectively exists for the asset class structure, as they aren't seeing systemic risk. Discovery of contagion where major players actually have bad collateral, disproving Waller's "idiosyncratic" view.

When asked about "headlines about another fund... struggling to meet redemptions," Waller responds: "I don't see big, really big widespread problems... couple of cases of certainly fraud... I don't think as a whole the private credit market is in any serious trouble." The market currently fears a systemic liquidity crisis in Private Credit (the "shadow banking bubble" narrative). Waller, a key regulator, explicitly isolates these issues as "fraud" rather than systemic failure. This greenlights the major, high-quality asset managers (Blackstone, KKR, Apollo) to continue gaining market share as fears of a regulatory crackdown or sector-wide collapse dissipate. LONG. The "Fed Put" effectively exists for the asset class structure, as they aren't seeing systemic risk. Discovery of contagion where major players actually have bad collateral, disproving Waller's "idiosyncratic" view.

When asked about "headlines about another fund... struggling to meet redemptions," Waller responds: "I don't see big, really big widespread problems... couple of cases of certainly fraud... I don't think as a whole the private credit market is in any serious trouble." The market currently fears a systemic liquidity crisis in Private Credit (the "shadow banking bubble" narrative). Waller, a key regulator, explicitly isolates these issues as "fraud" rather than systemic failure. This greenlights the major, high-quality asset managers (Blackstone, KKR, Apollo) to continue gaining market share as fears of a regulatory crackdown or sector-wide collapse dissipate. LONG. The "Fed Put" effectively exists for the asset class structure, as they aren't seeing systemic risk. Discovery of contagion where major players actually have bad collateral, disproving Waller's "idiosyncratic" view.

"I still have a view that all the tariff risk is to the downside... I don't see big increases in tariffs spread all over the place... Deals are going to potentially get made." Importers and Retailers have likely been battered by fears of a "new round of tariffs" (margin compression). Waller suggests these tariffs are negotiating leverage ("deals made") rather than permanent policy. If tariffs don't happen or are significantly lower than feared, these stocks re-rate higher as margin compression fears vanish. LONG. A contrarian bet against the consensus "Trade War" narrative. The administration ignores economic logic and implements blanket tariffs regardless of deals, crushing importer margins.

Waller states, "I've been more worried about the labor market versus the inflation risk... I've always believed inflation was going to come back down once tariff affects pass through." He also notes regarding oil: "For us, thinking about policy... this is unlikely to cause a sustained inflation." The bond market often sells off (yields up) on headline inflation fears (oil spikes, tariff talk). Waller is signaling that the Fed will *look through* these supply-side shocks. His reaction function is asymmetric: he will ignore high headline inflation caused by oil/tariffs but will cut rates aggressively if the "fragile" labor market cracks. LONG. You are buying the Fed's willingness to cut rates despite temporary inflationary noise. If oil prices do not "unravel" and instead trigger a wage-price spiral, the Fed will be forced to pivot back to hawkishness.

When asked about "headlines about another fund... struggling to meet redemptions," Waller responds: "I don't see big, really big widespread problems... couple of cases of certainly fraud... I don't think as a whole the private credit market is in any serious trouble." The market currently fears a systemic liquidity crisis in Private Credit (the "shadow banking bubble" narrative). Waller, a key regulator, explicitly isolates these issues as "fraud" rather than systemic failure. This greenlights the major, high-quality asset managers (Blackstone, KKR, Apollo) to continue gaining market share as fears of a regulatory crackdown or sector-wide collapse dissipate. LONG. The "Fed Put" effectively exists for the asset class structure, as they aren't seeing systemic risk. Discovery of contagion where major players actually have bad collateral, disproving Waller's "idiosyncratic" view.

"I still have a view that all the tariff risk is to the downside... I don't see big increases in tariffs spread all over the place... Deals are going to potentially get made." Importers and Retailers have likely been battered by fears of a "new round of tariffs" (margin compression). Waller suggests these tariffs are negotiating leverage ("deals made") rather than permanent policy. If tariffs don't happen or are significantly lower than feared, these stocks re-rate higher as margin compression fears vanish. LONG. A contrarian bet against the consensus "Trade War" narrative. The administration ignores economic logic and implements blanket tariffs regardless of deals, crushing importer margins.

"I still have a view that all the tariff risk is to the downside... I don't see big increases in tariffs spread all over the place... Deals are going to potentially get made." Importers and Retailers have likely been battered by fears of a "new round of tariffs" (margin compression). Waller suggests these tariffs are negotiating leverage ("deals made") rather than permanent policy. If tariffs don't happen or are significantly lower than feared, these stocks re-rate higher as margin compression fears vanish. LONG. A contrarian bet against the consensus "Trade War" narrative. The administration ignores economic logic and implements blanket tariffs regardless of deals, crushing importer margins.

Waller states, "I've been more worried about the labor market versus the inflation risk... I've always believed inflation was going to come back down once tariff affects pass through." He also notes regarding oil: "For us, thinking about policy... this is unlikely to cause a sustained inflation." The bond market often sells off (yields up) on headline inflation fears (oil spikes, tariff talk). Waller is signaling that the Fed will *look through* these supply-side shocks. His reaction function is asymmetric: he will ignore high headline inflation caused by oil/tariffs but will cut rates aggressively if the "fragile" labor market cracks. LONG. You are buying the Fed's willingness to cut rates despite temporary inflationary noise. If oil prices do not "unravel" and instead trigger a wage-price spiral, the Fed will be forced to pivot back to hawkishness.

"I still have a view that all the tariff risk is to the downside... I don't see big increases in tariffs spread all over the place... Deals are going to potentially get made." Importers and Retailers have likely been battered by fears of a "new round of tariffs" (margin compression). Waller suggests these tariffs are negotiating leverage ("deals made") rather than permanent policy. If tariffs don't happen or are significantly lower than feared, these stocks re-rate higher as margin compression fears vanish. LONG. A contrarian bet against the consensus "Trade War" narrative. The administration ignores economic logic and implements blanket tariffs regardless of deals, crushing importer margins.