#1325 Darius Dale on Bitcoin, Stocks All-Time Highs: Remain Bullish?

— Inflation persistence: Core inflation measures remain sticky (4.1–6.7% on three-month annualized basis), driven partly by services and housing costs, despite expectations of "immaculate disinflation."

— Small business sentiment: NFIB survey shows sequential slowdowns in price plans and compensation indices at multi-year lows, suggesting reported inflation stickiness may be transitory.

— Global liquidity drivers: China's aggressive PBOC easing and private-sector liquidity creation (non-bank financing) are offsetting some U.S. fiscal contraction; U.S. policy rate matters less than market expectations around it.

— Political pressure on policy: Biden's trailing Trump by 4 points in betting odds, likely to push Treasury and fiscal authorities toward accommodative spending (CHIPS, IRA) and lower Treasury balance targets, injecting $500–750B in liquidity.

— Energy prices and confidence: Gasoline up 23% YTD; though energy is only 2.4% of personal consumption, it drives consumer confidence metrics that influence voter psychology ahead of elections.

— Market regime risk: Transition from "Goldilocks" (risk-on) to "risk-off inflation" regime likely if immaculate disinflation ends above Fed's comfort level; expect 12–15% equity correction or 30–50% Bitcoin pullback without crash conditions.

— Monitor trim mean CPI and NFIB survey subindices (price plans, compensation) for leading signals of disinflation trajectory; don't rely on headline alone—breadth and forward-looking survey data matter more.

— Position defensively if immaculate disinflation narrative breaks and inflation sticks above ~3% by mid-to-late 2024; a shift from Goldilocks to risk-off inflation regime could trigger 12–15% equity corrections or larger Bitcoin declines without a full crash.

— Track global liquidity flows (PBOC easing, private credit creation, Treasury cash management) more carefully than Fed funds rate; political pressure for fiscal stimulus in election season may override Fed tightening, keeping conditions looser than headlines suggest.