The Macro Trading Floor US Dollar Hedging: A Real Risk or Just a Narrative?
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Jan 23, 2026 They revisit tariff threats and market moves that echoed April–May 2025. They debate whether global pension funds will start hedging massive USD exposures. They explain why tariffs did not reliably strengthen the dollar and how policy trust affects risk premia. They explore career risk and home bias that keep funds tied to US assets. They contrast bounded FX/rates with unbounded commodities and equities.
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Silent Retreat Recentered Brent's Mind
- Brent describes a silent meditation retreat where he sat eight hours a day and felt intense mental and physical pain.
- He compares the experience to defragging a hard drive and says external concerns faded over two days.
Political Risk Adds A Dollar Risk Premium
- Markets price a permanent risk premium when governments act unpredictably and trust falls.
- Brent says this keeps the dollar nearer lows and fuels demand for non‑counterparty hedges like gold.
Market Tattooed Tariff Threats Into Tightening
- Alf highlights the market's immediate negative reaction to tariff threats as a tightening of US financial conditions.
- He notes weaker dollar, bond sells, and equity falls amplify tariffs' inflationary hit on US consumers.
