CRAIG SHAPIRO | Something is going to break by the Mid-Terms!
Metals and Miners
4,526 views
Description
Senior macro strategist Craig Shapiro returns to the Metals and Miners pod on 9/30 with a blunt read on the bond market. With the Treasury curve near or above 5 percent, interest expense crowding out the federal budget, and AI capex competing for the same pool of capital, he argues the cost of money is finally being repriced after years of suppressed volatility.
In this conversation with host Gary Bohm, Shapiro walks through why higher yields are not cleanly killing inflation, why the economy looks bifurcated between the AI build-out and everything else, and why he expects a financial accident before the midterms. He also covers Treasury-Fed coordination, Kevin Warsh, a possible Democratic sweep in the Mid-terms and what that would mean for spending and wider deficits, a near-term risk-off move versus a later hard-asset bid, housing, energy and the Strait of Hormuz, why a broad recession has not shown up yet, farmers and food inflation into 2027, and where the Fed put might actually sit.
Shapiro’s bottom line: the equity market has not fully noticed the rising cost of capital yet. That does not mean it will not. He frames this as a period for risk management, not heroics, with gold, natural gas, power and AI infrastructure as the areas he wants exposure to once liquidity returns.
Chapters
0:00 Intro
1:04 The cost of capital is rising
2:13 Can the U.S. sustain 5 percent rates and soaring interest expense?
3:41 Printing money, nominal GDP, and the AI spending boom
6:15 Are higher rates adding to inflation?
7:10 Interest expense, short-end issuance, and competing for capital
9:10 Credit stress, the K-shaped economy, and a break before the midterms
12:42 Bessent, buybacks, and whether the Fed gets pulled in
14:44 Inflating out of the debt, and what Warsh was hired to do
18:51 A quarter-point hike, politics, and more spending either way
21:02 Democratic sweep odds, term premium, and AI self-regulation
23:58 Crash, rotation, or a 2008-style collapse?
24:39 Near-term risk-off, then gold, Bitcoin, and hard assets
27:42 Housing after the liquidity comes back
29:45 Oil, diesel, Hormuz, and the war
34:52 Why there has not been a broad recession yet
39:02 Farmers, diesel, fertilizer, and food into 2028
42:19 Does the Fed stand aside or print?
47:48 What to own to get to the other side
Sound Bites
“The cost of capital is rising, and folks who are not used to trading in a volatile interest rate environment are going to be surprised.”
“The United States would never default on its debt because we can always print the money. The question is when, and how much inflation we will tolerate.”
“You’re running a bifurcated economy where parts of it are working regardless of the interest rate and parts of it are really struggling.”
“If the Fed really wanted to slay inflation, they could take rates to ten percent. I don’t think anyone would really like that.”
“The markets are trying to find the levels of interest rates that are going to break things.”
“I think they are going to break between now and the midterms.”
“It’s highly unlikely, over 100 percent of debt to GDP, that you grow your way out of this. What’s more likely is that we inflate our way out.”
“I don’t think they’re trying to engineer a crisis so they can print. It’s more likely we find ourselves in a crisis that begets the printing anyway.”
“The only way out of a risk-asset correction is with more liquidity. That’s when gold starts to work again. That’s when Bitcoin starts to work again.”
“To believe the Fed isn’t going to step in is naive. The question is where the Fed put is struck.”
“Just because the broad equity market hasn’t noticed the rising cost of capital yet doesn’t mean it’s not going to. This is a time for prudence.”
Connect With Craig Shapiro
NinjaTrader Live: Senior Macro Strategist
X: https://www.x.com/@CES921
Connect With Metals and Miners
Substack: https://www.metalsandminers.substack.com
Website: https://www.metalsandminers.com
X: https://www.x.com/@GaryBohm5
MineVantage: https://www.metalsandminers.com/MineV...
Leave a Comment
Craig sees bond yields going vertical and believes something is going to break, and likely by the mid-terms. Do you agree? Leave a comment below!
⚠️DISCLAIMER: We do not accept any liability for any loss or damage incurred from you acting or not acting as a result of watching any of our publications. You acknowledge that you use the information we provide at your own risk. Do your research. *This video is not financial advice. The channel is not responsible for the performance of sponsors and affiliates.
Copyright Notice: This video and our YouTube channel contain dialogue, music, and images that are the property of Metals and Miners. You are authorized to share the video link and channel and embed this video in your website or others as long as a link back to our YouTube channel is provided.
© Metals and Miners
7 Comments
Lance Roberts says to watch for when the market drops like 2% - 2 days in a row. I guess that means when "they" can't stop the decline by tweaking a few knobs.
CRAIG SHAPIRO | Something is going to break by the Mid-Terms!
Metals and Miners
4,526 views
Description
Senior macro strategist Craig Shapiro returns to the Metals and Miners pod on 9/30 with a blunt read on the bond market. With the Treasury curve near or above 5 percent, interest expense crowding out the federal budget, and AI capex competing for the same pool of capital, he argues the cost of money is finally being repriced after years of suppressed volatility.
In this conversation with host Gary Bohm, Shapiro walks through why higher yields are not cleanly killing inflation, why the economy looks bifurcated between the AI build-out and everything else, and why he expects a financial accident before the midterms. He also covers Treasury-Fed coordination, Kevin Warsh, a possible Democratic sweep in the Mid-terms and what that would mean for spending and wider deficits, a near-term risk-off move versus a later hard-asset bid, housing, energy and the Strait of Hormuz, why a broad recession has not shown up yet, farmers and food inflation into 2027, and where the Fed put might actually sit.
Shapiro’s bottom line: the equity market has not fully noticed the rising cost of capital yet. That does not mean it will not. He frames this as a period for risk management, not heroics, with gold, natural gas, power and AI infrastructure as the areas he wants exposure to once liquidity returns.
Chapters
0:00 Intro
1:04 The cost of capital is rising
2:13 Can the U.S. sustain 5 percent rates and soaring interest expense?
3:41 Printing money, nominal GDP, and the AI spending boom
6:15 Are higher rates adding to inflation?
7:10 Interest expense, short-end issuance, and competing for capital
9:10 Credit stress, the K-shaped economy, and a break before the midterms
12:42 Bessent, buybacks, and whether the Fed gets pulled in
14:44 Inflating out of the debt, and what Warsh was hired to do
18:51 A quarter-point hike, politics, and more spending either way
21:02 Democratic sweep odds, term premium, and AI self-regulation
23:58 Crash, rotation, or a 2008-style collapse?
24:39 Near-term risk-off, then gold, Bitcoin, and hard assets
27:42 Housing after the liquidity comes back
29:45 Oil, diesel, Hormuz, and the war
34:52 Why there has not been a broad recession yet
39:02 Farmers, diesel, fertilizer, and food into 2028
42:19 Does the Fed stand aside or print?
47:48 What to own to get to the other side
Sound Bites
“The cost of capital is rising, and folks who are not used to trading in a volatile interest rate environment are going to be surprised.”
“The United States would never default on its debt because we can always print the money. The question is when, and how much inflation we will tolerate.”
“You’re running a bifurcated economy where parts of it are working regardless of the interest rate and parts of it are really struggling.”
“If the Fed really wanted to slay inflation, they could take rates to ten percent. I don’t think anyone would really like that.”
“The markets are trying to find the levels of interest rates that are going to break things.”
“I think they are going to break between now and the midterms.”
“It’s highly unlikely, over 100 percent of debt to GDP, that you grow your way out of this. What’s more likely is that we inflate our way out.”
“I don’t think they’re trying to engineer a crisis so they can print. It’s more likely we find ourselves in a crisis that begets the printing anyway.”
“The only way out of a risk-asset correction is with more liquidity. That’s when gold starts to work again. That’s when Bitcoin starts to work again.”
“To believe the Fed isn’t going to step in is naive. The question is where the Fed put is struck.”
“Just because the broad equity market hasn’t noticed the rising cost of capital yet doesn’t mean it’s not going to. This is a time for prudence.”
Connect With Craig Shapiro
NinjaTrader Live: Senior Macro Strategist
X: https://www.x.com/@CES921
Connect With Metals and Miners
Substack: https://www.metalsandminers.substack.com
Website: https://www.metalsandminers.com
X: https://www.x.com/@GaryBohm5
MineVantage: https://www.metalsandminers.com/MineV...
Leave a Comment
Craig sees bond yields going vertical and believes something is going to break, and likely by the mid-terms. Do you agree? Leave a comment below!
⚠️DISCLAIMER: We do not accept any liability for any loss or damage incurred from you acting or not acting as a result of watching any of our publications. You acknowledge that you use the information we provide at your own risk. Do your research. *This video is not financial advice. The channel is not responsible for the performance of sponsors and affiliates.
Copyright Notice: This video and our YouTube channel contain dialogue, music, and images that are the property of Metals and Miners. You are authorized to share the video link and channel and embed this video in your website or others as long as a link back to our YouTube channel is provided.
© Metals and Miners