The Good Times Are Coming Again

To investors,

There has been fear and maximum negativity dominating financial markets in the last few months. All the pessimists are wrong though. I believe things are about to get very crazy in markets.

The sell-off in stocks, bitcoin, and other assets earlier this year was based on uncertainty. As we get clarity on the economic policies of this administration, we should expect asset prices to aggressively recover. But the thing is that asset prices have already recovered without total clarity — the S&P 500 is only down 4% year-to-date, while bitcoin and gold are both positive.

Given this recovery has happened without a single trade deal announced or the Fed cutting interest rates suggests we should see new all-time highs in various asset prices before the end of 2025. Why? Because the trade deals and rate cuts are coming.

The President announced this morning that his administration will be revealing a comprehensive trade deal with the UK later today. Although it is only the first deal, the market will likely be excited about progress and momentum. They want to know that the President and his team are going to be able to execute these trade deals. Announced deals brings certainty and certainty brings higher asset prices.

You can see this clearly in the bitcoin price today — the digital currency is knocking on the door of $100,000 per coin again. This is after the asset traded down to about $76,000 just a month ago. The rapid recovery in bitcoin and other assets have also brought enthusiasm back into the market.

Green candles have a way of putting everyone in a good mood. So my expectation is there will be more trade deals announced throughout the summer. How many? I don’t know. How robust or comprehensive will they be? I don’t know that either. But I don’t think it matters much. The market doesn’t care about the specifics of the deals nearly as much as it cares about the deals signifying the disappearance of uncertainty.

Which brings me to my next point — the Federal Reserve will have to cut interest rates in the coming months. Inflation remains at depressed levels according to alternative, real-time inflation metrics. These alternative readings usually show up in the government’s data a few months later, so we should see the falling inflation numbers continue through the summer as well.

As inflation continues to prove less of a problem, the Federal Reserve will be pushed to lower the interest rate to ensure that cheaper capital can come into the market. If the central bank doesn’t do it, there is a risk of an economic slowdown. No one wants an economic slowdown.

In fact, the President will likely go hard at tax cuts and deregulation to spur economic growth. The Fed will cut rates to pursue the same goal. And, of course, whether we like it or not, many politicians are going to do their best to print money and stuff it in every corner of the economy. Thankfully, this administration seems to be more focused on budget issues than previous administrations, but that doesn’t mean the national debt won’t continue to go higher.

So if you think about where we are — we have asset prices in a neutral to positive position. This all happened without policy clarity, announced trade deals, or interest rate cuts. If we get those three things in the coming months, asset prices will push higher and investors will have amnesia about their ridiculous freak-out just a few weeks ago.

The market is a voting machine in the short-term and a weighing machine in the long-term. Nothing has structurally changed about the US economy. It was all media-induced fear that pervasively spread like a mental virus through the investment community. Some people were immune to the distraction, while others fell ill when they came in contact with it.

You can’t change the past. However, you can position yourself to benefit from what is coming on the horizon. The good times are going to roll again. We may party like it is 2021 again. Just make sure you apply whatever lessons you learned last time, so you don’t make any mistake twice. That is what learning is about. That is why most of us are drawn to the intellectual challenge of investing. And we should thank the market gods for giving us another chance at such an attractive setup.

Hope you all have a great day. I’ll talk to everyone tomorrow.

- Anthony Pompliano

Founder & CEO, Professional Capital Management

🚨 READER NOTE: Polina Pompliano published an in-depth profile of Ryan Serhant, the entrepreneur using his social media following to build a multi-billion dollar real estate juggernaut. She followed him around for a day, spoke to more than 20 people in his orbit, and got his competitors to go on the record with their true feelings about Ryan. Lastly, my favorite part is when Ryan tells Polina that he is driven by revenge against the gatekeepers who tried to keep him out of the industry. You can read the full piece here.

Anthony Scaramucci Explains Bitcoin In Light Of The Current Administration

Anthony Scaramucci is the Founder and Managing Partner of SkyBridge Capital.

In this conversation we talk about bitcoin, tariffs, economy, Trump, and his brand new bitcoin book.

Enjoy!

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