6 of them are by Robert Kaplan, who is the President of the Federal Reserve Bank of Dallas and was a Vice-Chairman at Goldman Sachs (GS) with a 23-year carrer there before being sent off to the Fed. Kaplan is the Fed's Inflation Hawk and that means, most likely, he's here to cool off the markets so make sure you have your hedges up to date (see Friday's PSW Report) as it's not only time for retail earnings (which could be rough) but also options expire on Friday – so strap yourselves in...
"What you don't know is, depending on how long that goes on, whether that starts to get embedded in inflation expectations, and you worry that inflation expectations start to get to be more elevated, and then you are getting them elevated to a level that is not consistent with anchoring them at 2%. That's the part I'm concerned about – this is a risk for me." – Kaplan
Also signaling caution is AT&T's (T) spinning off Warner Media to merge with Discovery (DISCB) for $43Bn in cash. T bought Warner Media for $81Bn just 3 years ago and has been criticized for holding $169Bn in total debt – the most of any non-financial company. T will maintain 71% ownership in the combined company, so a good deal for them overall but it seems very likely they are reducing debt ahead of a cycle which will raise their borrowing costs and T pays…
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