YouSaid · the spoken record

Skanda Amarnath

lines on the record: 32
first: 2025-08-15
most recent: 2025-08-15
sittings or episodes: 1
sources: podcast

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“Look at total hours growth among rank and file employees. If you look at total income growth among those workers, it's pretty much fine. That was actually okay. And so we might have gotten the worst jobs report already. If we don't, then obviously the Fed can probably have more confidence cutting. But if it's actually the case that we had a Liberation Day shock, but it didn't break things, especially because things got reversed to a large degree, then you might be left in a situation where it's just slowing growth in real terms and maybe the nominal trajectory of the economy, the total dollar spend, total dollars earned aren't as adversely affected. And that might not be a world in which you expect both high rate cuts or anything as sort of deeply recessionary, at least in the short run.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“Confidence might be misplaced, but at least in the short run, like there's some wisdom in it. And that to me is like a reason to probably shade against taking the bleakest view right now. And I think even if you look at the jobs report that everyone, I think rightfully said, has a lot of weakness in it.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it does seem like there's more growth optimism in cap markets, and I think tech is part of the story, right? Now, the S&P 500, if you kind of adjust for reclassification, is about half tech, right? So it's clearly growing in terms of its relevance. And at the same time, all this tech spending is probably keeping the business cycle afloat on some level, at least more so than it would otherwise be the case. But if you look at stuff like even in equal weighted S&P or you look at other sort of measures that may be more neutral to the tech dynamic, they've also shown a decent amount of optimism, right? So those are also telling you there's a lot of confidence.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“They kind of miss that good spices matter to service prices. So think about insurance, think about the cost of goods matters there. If you think about leasing, rental, airfares matter are affected by energy prices, food services prices are affected by food prices. And so the Fed could easily be caught off sides again. And I think that's something that I worry about independent of whoever is the leader, whether it's Chris Waller, whether it's Kevin Warsh, whether it's David Zervos. David Zervos.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“And maybe that makes sense because this is sort of a time of leadership flux where there is going to be someone else who's fed chair in a year. And maybe that person will want to have more of a say and doesn't want to be stomped on. But they have said that they want to do some of these changes to the framework and then do a review of their communications. And especially at a moment when you have these conflicting forces where there are things that are pushing up inflation and same time there are signs that labor markets are slowing. It just feels like what the Fed's going to communicate is going to be confusing. I want a good example of this from your episode with Mary Daly was basically saying, well, we have goods inflation that might be tariffs, but like services, X housing looks to be not inflationary. And the Fed basically said the same story in 2021 and then it spread. And it spread because for some people say, well, it's because labor market was too strong.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“This was the fate thing. This was when they cited flexible average inflation targeting, that high employment wasn't inherently a bad thing or inherently an inflationary thing. They made some tweaks to their framework. There are people who blamed those tweaks for the reason why the Fed allowed all this inflation to happen. I think they kind of messed around some counterfactuals, but they are doing the same exercise now, but just much more low profile.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“The one question I selfishly am interested in is what are they going to do with the framework here? So the framework review Was much fanfare about it in 2019 and 2020. This”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“Consolidation of corporate tax cuts and at the same time like there's obviously an aging population that does have more demands for major social insurance programs Frankie Joe. Yeah, I've become a cranky. It's just like.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“Which case, it's not a big revenue raiser? That's one argument you can make. If you think it's actually still a lot of money being raised, and yet we're still seeing 10 year yield dynamics as they are, maybe it's something else. I mean, I think the problem always with stories about deficits and how they drive interest rates tend to always be, there's like a missing link there, or at least there's not a lot of robust correlation here between the scale of the deficit and what interest rates end up looking like. And I do think institutional descriptions of what's going on kind of have a little more merit. Like we are doing some things as a central bank and in ways that can undermine investor confidence. I think that strikes me as more compelling. But at the margin, if you wanted to address the deficit for whatever reason, yeah, there's probably a lot of room to do that when we just did a pretty big sort of”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“There's certainly an argument for if you wanted to try and get demand down, then you could possibly do that, right? So if you think demand is a problem, right, then you probably wouldn't be so worried about the labor market, right? So that's one part of it. I also say like folks that have been saying the tariffs are a big revenue raiser, right? One part of it is, yeah.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“And that again kind of speaks to undermining independence. If you think this process of setting interest rates is not really being guided by something relatively neutral politically, something that's more focused on the data, but it's really just about pleasing certain presidential preferences and whims on a short-term basis as a long-term investor, I might want more compensation for that. I think there's some merit to that argument at least.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“Political convenience can cut the other way at another point in time. Let's say there are people who are doing things for partisan reasons today, and maybe it's a different person in the White House in the future. And then there's also just the issue of, well, there's just more instability. I want more compensation for that risk. And I do think, like we're seeing, if you look at the slope between five years and five-year notes and 10-year notes, abnormally high, even considering that rate cuts have been priced in. I know that Joe is a term premium skeptic, and I, to some extent, am too, but I do think that there's more suggestive evidence now that you are seeing more demands for competition for risk”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there's probably two things here that stick out to me. One is well, inflation still seems like it's there, right? We haven't gotten things back to 2%. And so there's just a risk of the Fed being caught offsides here if the Fed starts to cut more aggressively at a time when inflation might pick up. You could say, well, this time inflation is transitory. But it's like, we're dealing with potentially big macro adjustments. They might be costly. And if nominal incomes, labor income growth is reasonably solid. The cost might get pushed through, right? To the consumer because the consumer can pay. And that's a dynamic that markets have to be sensitive to. So there's a level of, well, you're actually adding more inflation risk. And so that needs to be compensated for. There's also, I think, a level of political manipulation risk, right? If you actually did lower rates for reasons that aren't really grounded in data, I mean, Kevin Worst said, I don't care about data dependence. If you're not doing things for like relatively neutral reasons and you're doing things for political convenience, one.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly. Housing was the big pain point, and you're not really getting that effect. That, to me, suggests, there is some level of a credibility gap here. If you're just saying, I'm going to cut rates no matter what, no matter what the inflation rate is because I want to do it for political motivation. I mean, I want investors obviously need to be compensated on some level for risk and also for the risk that maybe some in the future rates might go back up. If the people who are arguing for lower rates today would argue for higher rates under a different political environment, that's not exactly, that doesn't lend itself to getting long-term interest rates lower.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“I do have to ask though all the lobbying for lower rates, we have a substantial number of rate cuts priced in over the next 12 months. And yet long-term interest rates haven't really budged that much. Which is, if you think about where the pain points and the frustration are with higher interest rates right now, or at least to the extent you think 4.3% Fed funds rate is high, and that's part of the reason why tenure yields are at 4.2, 4.3%, roughly speaking. Like, you're not getting much effect from the rate cuts being priced right now. And I do think I kind of raised some questions about what is the actual objective here? Even if you get the rate cuts you so desperately wish, especially if it's coming out of.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I mean, there are some names to take seriously. I'm not saying, but I do think the length of the list being offered, some of them are clearly not. Serious names being put forth, but it may serve some tactical purpose for the kind of policies they want if they're trying to broaden the list of people who they're considering, get those people to lobby more actively and publicly for lower rates, then that might be something White House services.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“I can't take it seriously, right? I think as far as the number of names that have been thrown, I don't think Janet Yellen is being considered actively. So these are things that seem very”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“If they don't do what the Treasury says, then they're clearly trying to push back against the Treasury in some way. And so then there will be one set of stakeholders who are upset. And at the same time, there are others who will be saying, like, if the Fed does cut 50 basis points, it's like, okay, they're just following Treasury. We should listen to Scott Bessant now. And that is a dilemma for how you really handle the optics that Mary Daly talked about this on your episode, which was. It will matter to a point, and yet I'm sure there'll be plenty of cynics. Fed needs to”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I think there is on one level the federal will tell you they're playing the blinders on and they don't listen to what Scott Besson is most actively lobbying for, which was 50 basis points. And yet you can't deny that there is going to be some issue of how does the Fed do something in a way where it doesn't look politically manipulated. The legitimacy in some ways of whatever the Fed does gets undermined.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“A sort of yes and no question where the economists can give you both answers because it's like if something stops going down and starts flattening out and starts to pick up. There is a, like, it may not have started going up in outright terms, but the dynamic is it's part of the dynamic. So I think it's both.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“But we haven't yet seen the pickup. The pickup is probably coming very soon, or maybe right now. And as that happens and it has its pass-through into pricing over the coming years, I think there will be a sort of super cycle dynamic to this, that is likely to weigh on costs and investment. Sorry, just.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“Are one, I think the data center effect is something probably better to describe up until this very moment, like we're probably hitting something of an inflection point, right? So you are like low demand for electricity has stopped sort of having sort of its local stagnation.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“There's some bid for resources that could otherwise be deployed elsewhere, and also a bit if, let's say you're an investor and you're obviously some level of capital constraint going on, if you're investing everything in AI and basically cutting spending and investment in other areas, there's some sort of crowding out effect. But I would just also caution that's like a secondary effect, right? The primary one is still that there's more investment.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“And so the retirements have coming to a pause for hey, actually, we might be short on capacity if the data center demands are there and building new capacity is very expensive, very time intensive. And that seems to be an issue in at least a number of major regions. So there's like the Mid-Atlantic region, PJM. You're hearing this also show up, though, in terms of rates are increasing in Georgia. And New England has its own set of problems because it burns a lot of natural gas for electricity, but also doesn't have the requisite pipeline capacity. I love that I'm done.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“Is not great, so that's why we retire coal plants, we retire nuclear plants. Now you're seeing the other side of that, right? And it takes a long time to build that stuff.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I think that there's a bifurcation in energy prices, right? So we have your standard commodity prices specifically for oil have stayed at the lower end of the range, right? We're still speaking in the maybe low 60s, right, in WTI. So these are prices that should be not painful for the consumer. And yet we also have electricity price increases. And the electricity price increases that we've seen. Some part of that is due to natural gas price volatility, although natural gas price is more recently have come down. But there's also an area of things that go into electricity prices that are independent of that. And so in a lot of regions of the country, we're seeing capacity looks to be short. For the longest time, a lot of what you call thermal sources of electricity generation are typically not very economical, right? Or an economical in the short run sense because we have more capacity than we need. So the ability to be paid for that capacity.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“But the momentum in the labor market seems weaker because I think there probably is for any sort of trade sensitive sector, think about construction, manufacturing, retail trade, wholesale trade, warehousing. These are all showing weakness in job growth more recently. And so we're seeing that side of the equation. That should be disinflationary at the margin because less labor income should mean less consumer spending. And at the same time, you're putting in costs, adding to the business cost structure in ways that businesses can't stomach beyond a certain point, right? So some businesses are probably well positioned to absorb the hit to margin, but there's a limit to that as well. I think the issue with sort of the tariff slash trade shock, the modeling of it is if you have costs be pushed through to consumers over time, that can still be consistent with just real incomes sort of declining, even if nominal income growth is on steadier footing. And so that would be a very tricky.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“Deficits I would agree. I think that's possible we have both, right? That there is some what I would call stagflation light, right? That it's obviously unemployment rates are still low. That's pretty distinct from the stagflation of the 70s.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“Think the Fed is right now inclined to cut in September, given what we've seen in the labor market data. But I will just warn, just as the data got revised before, it could get revised again. It may be the case that May and June were the weakest months for job growth and that we see some local acceleration just because there's a little bit more certainty on trade policy than there was before. So there's still another jobs report before the September meeting. And there's another batch of inflation data that's also going to come out. And I think that will actually probably matter in the sense that typically you see price changes that are more volatile as you get into back to school season, holiday season, the turn of the calendar year. What we've seen thus far is typically the more benign months when you typically don't see prices change that much. So there's still a lot to play for in terms of going into the September meeting.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it certainly matters. It's not the only thing that matters. I think momentum and starting point both matter. And the starting point is better. The momentum is some of the weakest we've seen outside of a recession in a while. Now, some of that might be due to immigration. Some of that might be due to tariff uncertainty. Some of that might be due to interest rates are higher that matters for some sectors more, even if the financial conditions you just talked about are still pretty accommodative if you're talking about capital markets. So these are all kind of confusing in terms of what is the actual labor market trajectory that's permissible.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“Chair Powell, there's a feeling of wait, I remember in 2021 in August, I was pretty confident that this was going to be short term. And then we saw some increases and I said, well, we got to focus on getting the labor market back first. And then people kind of have held that against him accordingly. But now we have inflation picking up. And yeah, we also see a job market. Maybe employment levels look fine The momentum, the job growth that we were seeing in the latest release is understandably spooky too.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I think for PPI today, it should be seen as at least showing the inflationary side of the story is still there. Not just in terms of some of the aggregates may be distorted for a lot of reasons, but what matters for the Fed's inflation gauge is got moved up a bit. So what you're going to be tracking for inflation for July, CPI and PPI both matter. And so that's going to be moved up a bit. So we're going to be running at roughly 2.9% on Core PCE. We are higher now than we were last year. It's starting to look like the progress is starting to turn the other direction. Now, there may be some reasons why it is transitory this time, that it is temporary. And yet it doesn't really feel great. And I imagine for.”
2025-08-15 · Odd Lots · Lots More With Skanda Amarnath on This Moment in Macro · IDENTIFIED FROM THE TRANSCRIPT · source