Sticky Inflation. Cheap Volatility. A Less Predictable Fed. Why Aren’t Markets More Worried?

<p>This month on Last Call, Kevin Muir, Aahan Menon, Ben Hunt and Brent Kochuba break down the market through four lenses: macro, inflation data, narrative and options positioning. They examine whether midterm election volatility is underpriced, why inflation may be more demand-driven and persistent than headline data suggests, how the Fed's credibility has shifted under Kevin Warsh, and why options markets still look remarkably complacent.</p><p><a href="https://open.spotify.com/show/7yAhElUmIblNhLoe5rOHFZ" rel="ugc noopener noreferrer" target="_blank">Follow Last Call on Spotify⁠⁠⁠⁠⁠⁠⁠⁠</a></p><p><a href="https://podcasts.apple.com/us/podcast/last-call-|-a-different-kind-of-market-wrap/id1873625315" rel="ugc noopener noreferrer" target="_blank">⁠⁠⁠⁠⁠⁠⁠⁠Follow Last Call on Apple Podcasts⁠</a></p><p>Topics covered</p><ul><li><p>Why ending Fed forward guidance could create more uncertainty around interest rate decisions</p></li><li><p>Kevin Muir's case that midterm election volatility is unusually cheap</p></li><li><p>Why seasonal volatility, low implied correlation and election risk may favor owning protection</p></li><li><p>Aahan Menon on inflation breadth and why 70 to 80 percent of PCE components are above the Fed's 2 percent target</p></li><li><p>Why demand-driven inflation may be stickier than supply-driven inflation</p></li><li><p>How oil shocks can feed into core inflation and increase pressure on the Fed to hike</p></li><li><p>Ben Hunt on the sudden collapse in the Fed credibility narrative and why gold has responded</p></li><li><p>The four risks facing the Fed and Treasury: oil, fading fiscal stimulus, insurance and private credit stress, and the long end of the Treasury curve</p></li><li><p>Brent Kochuba on why implied volatility and put positioning show a market with very little fear</p></li><li><p>Nvidia options positioning, potential resistance near 250 to 275, and what dealer gamma says about the stock</p></li><li><p>Stanley Druckenmiller's AI-written Wall Street Journal op-ed and what AI-assisted writing means for investment thinking</p></li></ul><p>Timestamps</p><p>00:00 Midterms, inflation, Fed credibility and options complacency</p><p>07:45 Kevin Muir on why midterm volatility may be underpriced</p><p>11:55 Why this midterm could be more volatile than the options market expects</p><p>16:36 Cheap volatility and how election risk could get repriced</p><p>20:39 Inflation breadth and why the headline numbers miss the bigger problem</p><p>25:43 Why cooling inflation data may hide persistent demand-driven pressure</p><p>33:31 Ben Hunt on why the Fed credibility narrative suddenly reversed</p><p>40:01 Four risks the Fed and Treasury cannot afford to ignore</p><p>44:43 What the options market says after Jackson Hole</p><p>49:10 Why Fed events can become an expensive options tax</p><p>53:14 Why falling volatility could help stocks push toward new highs</p><p>57:34 Druckenmiller, AI-written investment commentary and authenticity</p><p>01:01:53 Why writing is part of thinking in an AI world</p><p>Learn more about the Excess Returns podcast network:</p><p><a href="https://excessreturns.co/" rel="ugc noopener noreferrer" target="_blank">https://excessreturns.co</a></p><p>No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.</p><p></p>