RUSH TRANSCRIPT Welcome back ░░░░░░░░ a frazzled trade lately ░░░░░░░░ has been relatively calm ░░░░░░░░ least in most parts ░░░░░░░░ the market Not everywhere ░░░░░░░░ For more we are ░░░░░░░░ now by quadratic capital ░░░░░░░░ founder and cio Nancy ░░░░░░░░ Back with me at ░░░░░░░░ nine So good to ░░░░░░░░ you again It s ░░░░░░░░ great to be here ░░░░░░░░ s good to talk ░░░░░░░░ volatility too in both ░░░░░░░░ rates market and in ░░░░░░░░ equity market We ve ░░░░░░░░ a little bit of ░░░░░░░░ pickup in the equity ░░░░░░░░ Not so much in ░░░░░░░░ the rates market You ░░░░░░░░ right into that Yeah ░░░░░░░░ rate volatility is literally ░░░░░░░░ about the first percentile ░░░░░░░░ the last three years ░░░░░░░░ s fallen tremendously especially ░░░░░░░░ Silicon Valley bank days ░░░░░░░░ was just 2023 It ░░░░░░░░ not you Know 510 ░░░░░░░░ ago At this point ░░░░░░░░ ve been through a ░░░░░░░░ We have So is ░░░░░░░░ going to pick up ░░░░░░░░ No You know the ░░░░░░░░ of owning protection and ░░░░░░░░ rate vol is super ░░░░░░░░ And I think the ░░░░░░░░ I always try to ░░░░░░░░ people is that your ░░░░░░░░ portfolio 25 of the ░░░░░░░░ is mortgages So if ░░░░░░░░ don t do anything ░░░░░░░░ re just naturally short ░░░░░░░░ rate volatility So I ░░░░░░░░ it s a good ░░░░░░░░ to be adding it ░░░░░░░░ because there are not ░░░░░░░░ things cheap out there ░░░░░░░░ Scott Everything s pretty ░░░░░░░░ When you when you ░░░░░░░░ at the volatility that ░░░░░░░░ ve seen in in ░░░░░░░░ for example in parts ░░░░░░░░ tech what do you ░░░░░░░░ of that Maybe it ░░░░░░░░ t even been that ░░░░░░░░ It s just been ░░░░░░░░ of straight down Yeah ░░░░░░░░ s definitely been a ░░░░░░░░ of turbulence in the ░░░░░░░░ space And I think ░░░░░░░░ question is there s ░░░░░░░░ so much debt that ░░░░░░░░ been issued in the ░░░░░░░░ markets to kind of ░░░░░░░░ this AI burn And ░░░░░░░░ we have a new ░░░░░░░░ chairman coming in And ░░░░░░░░ question is like how ░░░░░░░░ are they going to ░░░░░░░░ There s not a ░░░░░░░░ priced in So there ░░░░░░░░ a lot of room ░░░░░░░░ to to normalize the ░░░░░░░░ yield curve What s ░░░░░░░░ s your view on ░░░░░░░░ Right That your point ░░░░░░░░ yes There s not ░░░░░░░░ lot priced in And ░░░░░░░░ Einhorn was on I ░░░░░░░░ t know if you ░░░░░░░░ it this morning making ░░░░░░░░ same point Not a ░░░░░░░░ is priced in But ░░░░░░░░ re going to cut ░░░░░░░░ lot more than people ░░░░░░░░ What do you think ░░░░░░░░ s exciting thing for ░░░░░░░░ eyeball etf because we ░░░░░░░░ from the Fed cutting ░░░░░░░░ or from long dated ░░░░░░░░ going higher So either ░░░░░░░░ kind of normalizing the ░░░░░░░░ curve And it s ░░░░░░░░ different right now Because ░░░░░░░░ you remember starting out ░░░░░░░░ 2024 we had six ░░░░░░░░ priced in Now we ░░░░░░░░ have two cuts for ░░░░░░░░ next two years So ░░░░░░░░ s a lot of ░░░░░░░░ for Kevin Warsh when ░░░░░░░░ comes in to surprise ░░░░░░░░ market and cut more ░░░░░░░░ expectations Is that your ░░░░░░░░ expectation I think he ░░░░░░░░ Yeah I think people ░░░░░░░░ definitely seeing him as ░░░░░░░░ of an inflation hawk ░░░░░░░░ I think he could ░░░░░░░░ us and be an ░░░░░░░░ eagle hopefully Okay All ░░░░░░░░ We got rich clarida ░░░░░░░░ coming up in a ░░░░░░░░ bit So we ll ░░░░░░░░ about that Your best ░░░░░░░░ actionable right now is ░░░░░░░░ you always come with ░░░░░░░░ good Well I think ░░░░░░░░ interest rate vol is ░░░░░░░░ of a no brainer ░░░░░░░░ with vol being so ░░░░░░░░ I think inflation expectations ░░░░░░░░ though you know the ░░░░░░░░ likely is going to ░░░░░░░░ cutting rates I think ░░░░░░░░ are a good place ░░░░░░░░ own I love our ░░░░░░░░ etf that has the ░░░░░░░░ steepener inside of it ░░░░░░░░ the us Yield curve ░░░░░░░░ sisense is only about ░░░░░░░░ basis points So it ░░░░░░░░ really cheaply priced Normally ░░░░░░░░ s about 1 so ░░░░░░░░ re not a lot ░░░░░░░░ places of value out ░░░░░░░░ in the market And ░░░░░░░░ think that s that ░░░░░░░░ one opportunity You think ░░░░░░░░ keep You ve said ░░░░░░░░ a couple of times ░░░░░░░░ a lot of you ░░░░░░░░ value out in the ░░░░░░░░ Do you think the ░░░░░░░░ market s too expensive ░░░░░░░░ mean it might be ░░░░░░░░ higher but multiples are ░░░░░░░░ lofty Prices are pretty ░░░░░░░░ When I m talking ░░░░░░░░ prices I just mean ░░░░░░░░ always make your money ░░░░░░░░ you buy something You ░░░░░░░░ to buy low sell ░░░░░░░░ So obviously But there ░░░░░░░░ those who believe that ░░░░░░░░ multiples might be a ░░░░░░░░ rich on a historical ░░░░░░░░ but it can still ░░░░░░░░ higher if you know ░░░░░░░░ re going to get ░░░░░░░░ cuts the economy is ░░░░░░░░ to pick up This ░░░░░░░░ the bullish bet obviously ░░░░░░░░ it changes if that ░░░░░░░░ t happen But that ░░░░░░░░ the view Yes expensive ░░░░░░░░ it s still okay ░░░░░░░░ totally fine You know ░░░░░░░░ the whole point is ░░░░░░░░ diversification Interest rate markets ░░░░░░░░ the biggest market in ░░░░░░░░ world And most people ░░░░░░░░ t have them in ░░░░░░░░ financial portfolios So I ░░░░░░░░ why not add some ░░░░░░░░ and rates given that ░░░░░░░░ s an asset class ░░░░░░░░ s really cheaply priced ░░░░░░░░ you think that there ░░░░░░░░ the possibility that inflation ░░░░░░░░ going to surprise to ░░░░░░░░ upside that you know ░░░░░░░░ people talk about the ░░░░░░░░ that that still is ░░░░░░░░ a major issue and ░░░░░░░░ the curve is going ░░░░░░░░ steepen further as a ░░░░░░░░ of that I think ░░░░░░░░ curve normalizing is what ░░░░░░░░ re really expecting right ░░░░░░░░ It s only 42 ░░░░░░░░ points which is not ░░░░░░░░ Normally it s at ░░░░░░░░ 100 basis points a ░░░░░░░░ difference And I think ░░░░░░░░ few things out there ░░░░░░░░ diversification I think Why ░░░░░░░░ To me inflation is ░░░░░░░░ a trade about whether ░░░░░░░░ think it s going ░░░░░░░░ or lower You know ░░░░░░░░ audience right The real ░░░░░░░░ you have everybody has ░░░░░░░░ job everybody has a ░░░░░░░░ amount of savings Inflation ░░░░░░░░ not expensive right now ░░░░░░░░ s no expectation for ░░░░░░░░ expectations to go higher ░░░░░░░░ it s a good ░░░░░░░░ to be buying low ░░░░░░░░ not low Sell high ░░░░░░░░ you go Nancy Thanks ░░░░░░░░ s good to see ░░░░░░░░ as always Thanks Nancy ░░░░░░░░ here at post nine ░░░░░░░░ us still ahead the ░░░░░░░░ Federal Reserve vice chair ░░░░░░░░ clarida I just mentioned ░░░░░░░░ s back We ll ░░░░░░░░ his first take on ░░░░░░░░ jobs report today what ░░░░░░░░ could mean for the ░░░░░░░░ of rate cuts Why ░░░░░░░░ a sleep number smart ░░░░░░░░ Can it keep me ░░░░░░░░ when I m cold ░░░░░░░░ no I m always ░░░░░░░░ Sleep number does that ░░░░░░░░ I make my side ░░░░░░░░ Can I make my ░░░░░░░░ firmer Sleep number does ░░░░░░░░ Your ideal firmness and ░░░░░░░░ comfort all night Can ░░░░░░░░ help us sleep better ░░░░░░░░ better?