#374 Chris Whalen: Fed Policy Losing Efficacy, Rate Hike Coming Anyway, Private Credit Defaults at 6%

About this episode

Chris Whalen discusses the inefficacy of Fed policy, rising private credit defaults, and predictions for the housing market and inflation.

In this episode of The Wrap, Chris Whalen reveals bank incomes are up but the real story is the trading side of the house driving earnings, not lending, as deposits grow faster than assets forcing banks into trading operations. He warns private credit default rates have hit a record 6%, nearly 10 times worse than bank default rates, signaling the end of the credit cycle as non-banks now lead lending. Whalen predicts double-digit inflation remains likely, expects QE5 to come despite Warsh's denials since the Fed balance sheet must grow proportionally with federal debt, and argues Fed policy is losing efficacy against external war-driven inflation that raising rates won't fix. He discusses massive housing consolidation and M&A deals coming as mortgage lenders face crushing higher rates, details how private equity is rolling up every service provider imaginable (plumbers, electricians, dentists, oncologists) and "screwing them up terribly," warns TIPS aren't reflecting true inflation, and predicts major housing lender mergers between now and year end. Whalen maintains his thesis that the Fed doesn't control long-term rates and that shrinking the balance sheet would be…

People in this episode

Host: Julia La Roche

Guest: Chris Whalen

Topics covered

• Fed policy
• private credit
• inflation
• banking
• housing market
• M&A
• lending

Keywords

• Fed policy
• private credit defaults
• inflation
• bank earnings
• housing consolidation
• M&A deals
• QE5

Sponsors

Goldco

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