For nearly four decades, Dr. Lacy Hunt has been one of Wall Street's most steadfast bond bulls.
As chief economist of Hoisington Investment Management, Hunt built his reputation around a simple but powerful thesis: globalization, excessive debt and slowing growth would keep inflation and interest rates suppressed. He maintained that view through the aftermath of the financial crisis, a decade of ultra-easy monetary policy, and even the COVID explosion in money supply and inflation.
Now, the bond legend is making a major pivot.
Hoisington has slashed the duration of its bond portfolio and moved the proceeds into short-dated Treasury bills. With that, the wealth management firm also declared: the disinflationary regime that dominated the global economy from roughly 1990 through 2020 may be coming to an end.
Tonight at 7PM ET, Hunt will join ZeroHedge to explain why.
Hunt’s pivot preceded yesterday’s bond market scare followed by the Bessent Buyback we covered yesterday… evidently the bull turned bearish just in time.
At the heart of Hunt's new thesis are three structural changes: globalization is reversing (tariffs, onshoring), the global labor glut is disappearing (birthrate, aging boomers), and capital is becoming scarce (government deficits).
On the other hand, long-term inflation expectations remain relatively subdued. Foreign capital continues flowing into Treasuries. Global trade recently hit record levels relative to world GDP. And Hunt's thesis gives relatively little weight to the possibility that AI eventually produces a productivity boom powerful enough to become a major disinflationary force.
That is where tonight's discussion begins.
Hunt will be joined by Adam Taggart of Thoughtful Money and Brent Johnson, who popularized the "Dollar Milkshake Theory."
Taggart and Johnson will probe Hunt's new framework and pressure-test the assumptions behind one of the most consequential macro pivots in recent memory.
We'll ask the man himself. Watch tonight at 7PM ET here on the ZeroHedge homepage, X feed, and YouTube channel.