Premium"A Remarkable Amount Of Macro Uncertainty Is Priced Remarkably Cheap": Goldman's Top Quant Trader
In perhaps the most insightful and direct commentary we have sen in weeks from any Goldman trader, Brian Garrett - the bank's derivatives trading head - warned in a brief note over the weekend (full note available here for pro subs) that "a remarkable amount of macro uncertainty is being priced remarkably cheap…"
i/ a hawkish hike was delivered in the US and central banks across the globe firmly on a tightening path
ii/ both brent and US crude closed with a 100+ handle every day last week
iii/ escalation in the middle east continues (houthi news this weekend), with no clear sign of an off ramp (Trump-Xi this week, maybe?)
iv/ us 10y yields continue to knock on 5% and gs increased their year-end rates targets across developed economies
v/ there is growing backlash against the ai trade, aka the largest driver of economic growth in the US
vi/ one of the more-consequential midterm elections in years occurs in less than 2 months