Name: MacroVoices #550 Harley Bassman: In FED We Trust
Uploaded: 2026-09-17T19:54:06+00:00
Duration: 4042 s

Speakers

Harley Bassman — Managing Partner, Simplify Asset Management

Patrick Ceresna — Derivatives Specialist, MacroVoices

Erik Townsend — Founder & Host, MacroVoices

Summary

MacroVoices host Erik Townsend and Patrick Ceresna interview Harley Bassman about the Fed's hawkish hike, damaged credibility, fiscal recklessness, and rising term premiums. Bassman argues the Fed must regain trust, sees hyperscaler bonds as money good, warns on mortgage convexity, and predicts Bitcoin eventually goes to zero. Patrick Ceresna then presents a long TLT strangle to own bond volatility and reviews oil, the dollar, gold, copper, natural gas, and S&P 500 setups.

Fed delivered a hawkish hike and signaled another possible hike before Christmas; Harley Bassman wanted 50 bps one-and-done.
Bassman says lack of trust in the Fed and fiscal recklessness are driving long-term rates higher, not inflation expectations.
Bassman views hyperscaler bonds as money good despite heavy borrowing, but warns equity outcomes are uncertain.
Bassman warns mortgage-backed securities face negative convexity and widening spreads as the curve flattens.
Bassman predicts Bitcoin eventually goes to zero and dismisses it as a transactional tool.
Bassman sees USD stablecoin policy as supportive of Treasury demand but says it won't enable a rival reserve currency.
Patrick Ceresna recommends a January 2027 TLT 85/77 long strangle to own bond volatility.
Patrick reviews oil as trending higher, watches DXY breakout, gold at 4,400, crowded copper, extreme natural gas shorts, and rangebound S&P 500.

Ideas

Harley Bassman Managing Partner, Simplify Asset Management 14:45

Hyperscaler bonds are money good

Hyperscalers like Meta, Google, Amazon, Microsoft, and Oracle have huge borrowing needs but also massive cash-generating core businesses, so they can service debt even if rates rise 50-200 bps. Bankruptcy is unlikely; equity may suffer but bonds are money good.

Harley Bassman Managing Partner, Simplify Asset Management 19:36

Trust deficit drives long-term Treasury yields higher

Fiscal recklessness (6% deficit without war or recession) and damaged Fed credibility are raising the term premium investors demand to hold US dollars and long-term Treasuries. This is a trust problem rather than an inflation problem, and all rates are rising as a result.

Harley Bassman Managing Partner, Simplify Asset Management 23:02

Negative convexity makes agency MBS risky

Mortgage bonds are negatively convex covered calls. Recouponing has shifted the mortgage stack to higher coupons near strike, and falling/inverting yield curves make them more negatively convex, widening spreads. If you own MBS, be careful; prices can fall quickly when volatility rises.

Harley Bassman Managing Partner, Simplify Asset Management 44:52

Bitcoin eventually goes to zero

Bitcoin is an active war against a sovereign state and will eventually go to zero. As a transactional tool it is worthless compared to Visa's throughput, so it lacks fundamental support.

Patrick Ceresna Derivatives Specialist, MacroVoices 47:18

Long TLT strangle for bond volatility

Harley's concerns about fiscal credibility, less Fed guidance, and mortgage convexity point to more volatile bond markets. January TLT implied vol has rebounded from 10% to ~12% but remains at the low end of its one-year range, so own uncertainty through a long strangle rather than picking direction. The structure offers positive vega and two-sided convexity for about $179 per strangle.

Patrick Ceresna Derivatives Specialist, MacroVoices 53:37

S&P rangebound with CTA triggers below

Equities face a two-sided setup: fundamentals remain strong with resilient earnings and solid growth, but rising yields compress multiples and drag on markets. The S&P 500 is battling its 50-day moving average with CTA sell triggers below; a bullish reversal is possible if bulls hold the line, but base case is rangebound into expiration.

Patrick Ceresna Derivatives Specialist, MacroVoices 55:55

Respect oil uptrend; no deep reversion

Physical oil market disruption is real, war continues, Strait of Hormuz traffic is constrained, and fundamentals remain tight. Higher crude and diesel are driving inflation expectations. Oil is overbought but consolidating, and a deep reversion is not supported while geopolitical drivers are unresolved.

Patrick Ceresna Derivatives Specialist, MacroVoices 58:09

Watch DXY breakout follow-through

The Fed's hawkish message caused a decisive DXY breakout above 100, driven by a euro breakdown. However, one day does not make a new trend; follow-through is not yet confirmed. If the dollar bull trend resumes, it has major implications for assets that have been anticipating a weak dollar.

Patrick Ceresna Derivatives Specialist, MacroVoices 59:46

Gold at make-or-break 4,400 level

Gold's pullback is testing a line in the sand around 4,400. A reclaim of the 50-day moving average and breakout from the declining wedge would confirm resumption of the bull trend; a breakdown to 4,200 or 4,000 would mark a false start, but not a bearish secular view, just a delay into Q4 after the hiking cycle.

Patrick Ceresna Derivatives Specialist, MacroVoices 62:00

Copper crowded; watch 675 reclaim

Copper has a structural bull case from mine supply constraints, electrification, and AI demand, but positioning is extremely crowded at five-year extremes. The 8% tariff-driven correction stalled at the 50% retracement; if bulls reclaim 675 the trend can continue, but if rallies are distributed and lows break, the crowded long positioning is vulnerable.

Patrick Ceresna Derivatives Specialist, MacroVoices 64:17

Extreme gas shorts risk squeeze

Natural gas speculators are at extreme net short positioning (0 percentile, 220,000 contracts, lowest in five years). Fundamentals justify the shorts, but this creates fuel for a short squeeze if a catalyst emerges. If staying short, use convexity or options hedges because past squeezes caused serious volatility.

MacroVoices #550 Harley Bassman: In FED We Trust

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