Mostafa Bushehri

Equity returns over the past five years have been the Magnificent Seven versus everyone else. But this gap can’t persist forever.

Treasury Secretary Bessent confirms the shortlist for the next Fed Chair:
- Christopher Waller
- Michelle Bowman
- Kevin Warsh
- Kevin Hassett
- Rick Rieder
Decision expected by year end. 👀 #Fed

The US dominates global data center buildout. The US alone has 1.7× more data centers than all other major countries combined.

Cars Are Going the Way of Typewriters While journalists breathlessly report on a plane crash or a train derailment, they are silent on a more salient fact: about 1.2 million people will die this year in car crashes.

One of the best podcasts I’ve listened to (so good I played it twice!) Insightful conversation between @paul_podolsky and Alexei Andreev on Autonomous Vehicles and the future of cars as we know them.

substack.com/@paulpodolsk...

Historically, markets have mostly shrugged off US government shutdowns. The real risk this time is delayed economic data, like the jobs report, that the Fed relies on for monetary decisions.

China’s new restrictions on rare earths mark one of the toughest export controls ever. The trend is clear; the winners will be companies driving reshoring of critical minerals.

Soybeans will be a key topic in US-China talks in the weeks ahead.

China is turning up its nose at American soyabeans Midwestern farmers want their $12bn market back

By this time last year, China had bought ~40% of US soybean exports. This year? Zero.
Midwest farmers are losing share fast to South American suppliers.
www.economist.com/china/2025/0...

Looks like the current US administration is preparing to support its friend in Argentina. Let’s see if that’s enough to stabilize Mileinomics!

The Fed went with a 25 bps cut today. Based on the distribution of participants’ views for the appropriate FFR midpoint in 2025, it looks like we’re likely to see at least one more 25 bps cut this year (assuming no unexpected shocks!).

But the data says otherwise. Active funds, on average, continue to lag their benchmarks despite these shifts. 2/2

assive investment through ETFs and mutual funds has grown significantly over the past decade. The consequences include reduced market efficiency, weaker price discovery, and higher volatility. These conditions should create opportunities for alpha. 1/2

The latest University of Michigan consumer sentiment index plunged again this month (-4.8% M-M and -21% Y-Y).
Consumers see rising risks for business conditions, the labor market, and inflation.

Today’s CPI makes a 25 bps cut look more likely. The real question is whether the Fed stick with that, or go 50 bps to get ahead of a recession instead of waiting for it?

Final demand PPI fell 0.1% month-over-month (vs. +0.3% expected).
Annually, headline PPI rose 2.6% YoY (below the 3.3% estimate).
A #Fed cut next week now looks nearly certain. Question is: 25 bps or 50 bps?

Markets are euphoric on AI, and billions are pouring into private deals and infrastructure. The numbers suggest this party won’t last forever, but until then the dancing goes on!

T-bills account for over 20% of all marketable Treasury debt. When the Fed cuts, short-term yields tend to follow.
Behind the push to cut isn’t just growth worries, it’s also about paying less interest on government debt (more than $39 trillion in gross national debt).

How is AI showing up in GDP data?
Private consumption usually drives growth, but in 2025 the story flipped. So far this year, data center construction has contributed as much to GDP growth as consumer spending.

Shiller PE Ratio for the S&P 500 hit its highest level since the dot-com bubble.

Ivy League universities are on a debt binge The borrowers, including Harvard, Princeton and Yale, benefit from a “prestige premium”

Since January, Ivy League schools have issued over $1.7B in debt, the most since 2020. Despite federal pushback, the debt market is lending at rates comparable to “triple A” US companies like Johnson & Johnson.
www.economist.com/finance-and-...

Aramco inks $11B leaseback deal for Jafurah gas facilities with a BlackRock's GIP-led consortium, part of its plan to boost gas production 60% by 2030.
www.aramco.com/en/news-medi...

Private credit is stepping into the gap left by the long decline in the number of banks and tighter post-GFC regulations.

👀 #uranium

The US remains the most dynamic economy in the world.
Long-term optimism is strong, and new business application has surged since the November 2024 election.

A symbolic place to meet!
Alaska was purchased from Russia in the 1860s for about $7.2 million. In today’s dollars, that’s only around $120 million!

The chart shows the extreme AI concentration in the market today. Nvidia #NVDA now has the biggest weight in the S&P 500 of any individual stock since the data began in 1981.

This is why Modi calls Putin a “friend.”
Since the Ukraine war, sanctioned Russian crude & condensate have flowed to India, while Europe is effectively buying Russian oil via Indian intermediaries. #oott

Fossil fuels will supply more than 50% of data center power until 2030.

Hard to believe India would risk its shot at becoming the next global manufacturing hub just for discounted Russian oil.
If these tariffs stick, US companies may start rethinking their India relocation plans.
www.whitehouse.gov/presidential...

The previous admin turned a blind eye to India’s stance on the Ukraine war, all in the name of “China containment.” This one isn’t.

US-India ties have long been a one-way street. Time for a reset!