Name: Did The Fed Just Make Critical Mistake? It May Be ‘Too Late’ Now | Adrian Day
Uploaded: 2025-05-08T04:37:17+00:00
Duration: 2308 s

Speakers

Adrian Day — President, Adrian Day Asset Management

David Lin — Founder & Host, The David Lin Report / ex-Anchor, Kitco News

Summary

Adrian Day reacts to the May 2025 FOMC decision, arguing the Fed is being reactive and may be too late to cut rates. He sees tariffs slowing the economy more than causing sustained inflation. He remains near-term constructive on US stocks but cautious, expects a dollar bounce, warns of rising long-term Treasury yields, and is bullish on gold and gold mining stocks, especially senior producers and royalty companies.

FOMC left rates unchanged; Powell cited uncertainty and tariff risks.
Adrian Day criticized the Fed as reactive and said it may be too late to cut.
He expects tariffs to slow the economy more than they raise sustained inflation.
He sees a near-term dollar correction but longer-term concerns about foreign demand for US assets.
He warns long-term Treasury yields may rise due insufficient buyers.
He is bullish on gold as defensive insurance amid debt and uncertainty.
He is bullish on gold miners, especially senior producers and royalty companies.
He favors Barrick and Agnico Eagle within gold equities.

Ideas

Adrian Day President, Adrian Day Asset Management 12:15

Dollar near-term correction likely.

The dollar has fallen sharply this year without a correction, and with other central banks cutting while the Fed holds, rate differentials favor a near-term dollar bounce. He sees a DXY correction as likely but does not expect it to return to the start-of-year level; the first Fed cut should eventually reverse the dollar's attractiveness.

Adrian Day President, Adrian Day Asset Management 12:36

Near-term stocks strong; stay long cautiously.

Near-term, the U.S. stock market is likely to stay strong because sentiment is supportive, there is cash on the sidelines, and automatic 401(k)/ETF inflows, especially into S&P ETFs, keep buying. He remains long but is very cautious and looking for exits, preferring to be out early rather than late.

Adrian Day President, Adrian Day Asset Management 14:17

Foreign allocators may avoid US assets.

US policy is explicitly seeking a lower dollar and signaling less need for foreign capital, so foreign managers are likely to reconsider allocating to US assets at previous levels. That would pressure US assets broadly, including the dollar, Treasuries, equities, and real estate.

Adrian Day President, Adrian Day Asset Management 22:14

Gold is a defensive long-term holding.

Gold above $3,300 reflects global uncertainty, volatility, and concern about the US debt situation, and it is now serving as a relatively stable defensive asset. Central banks and long-term holders are buying for insurance rather than trading, pullbacks have been shallow, and many investors, including family offices, GLD holders, and retail coin buyers, remain under-allocated.

Adrian Day President, Adrian Day Asset Management 33:30

Gold miners remain cheap, not overbought.

Gold mining stocks are not overbought. Even after recent outperformance, they have not shown the leverage typical of early gold bull markets; valuations remain very low, margins and free cash flow are expanding as gold prices rise faster than mining costs, and GDX has seen outflows rather than mania.

Adrian Day President, Adrian Day Asset Management 35:48

Barrick valuation too low versus gold.

Barrick is trading near the lowest price-to-NAV in its history despite gold above $3,000 and expanding margins. Even allowing for concerns about its copper shift and Pakistan exposure, that valuation disconnect does not make sense.

Adrian Day President, Adrian Day Asset Management 36:08

Agnico still cheap on cash flow.

Agnico Eagle is one of the more expensive senior gold stocks, but rightfully so in his view because it is the gold standard of gold miners. Its price-to-cash-flow is still in the lowest 25th percentile of its 40-year history, leaving room for valuation expansion as margins rise.

Adrian Day President, Adrian Day Asset Management 37:34

Favor senior gold miners and royalties.

He favors gold miners broadly but says that at this point in the cycle investors should emphasize senior producers and royalty companies because they are the first and more certain to move.

Did The Fed Just Make Critical Mistake? It May Be ‘Too Late’ Now | Adrian Day

Summary

Ideas

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