What Bonds, Oil & Gold Are Telling Us | MIchael Lebowitz

Adam Taggart | Thoughtful Money® Jul 22, 2026

Summary

Oil, not inflation, is steering bond markets right now: crude's correlation with five-year yields is the highest since March 2020.

The guest expects bond yields lower by year end — current levels carry a war premium that should fade with the Iran conflict.

Credit spreads (extra yield corporate bonds pay over Treasuries) sit near 20-year lows, signaling complacency and ample liquidity — watch, don't act.

Gold is a bet on the Fed: with real rates (rates minus inflation) above 2%, policy is restrictive and gold faces headwinds.

Plan for scenarios, not point targets: think through $150 oil, $50 oil, and stalemate, and pre-decide how the portfolio responds.

Top takeaway Adam attributes the precious metals sell-off since January's blow-off top to three 'shoes dropping' — the mania breaking, war-driven higher oil forcing gold-buying countries to sell metal, and Kevin Warsh's hawkish turn at the Fed — and notes the channel urged viewers to take gains or hedge back in January.
He cites Chamath Palihapitiya's disclosure that his companies' AI token costs double about every 45 days against roughly 5% productivity gains, and argues all firms will have to rationalize AI usage as a result.
He treats physical gold as a one-way valve — a perpetual savings account held as defense against the long-term decline of fiat purchasing power — while using paper gold purely for trades.
He frames credit spreads as an early-warning indicator that starts moving before markets break, and says he watches them weekly with his RIA colleagues.
He reveals he bought his first home at age 55 after decades of waiting out the market, joking that 'the greatest fool' buying in now signals a housing top.

Top takeaway As of the recording, he argues bonds are being driven by oil rather than inflation or the economy: crude's correlation with five-year yields is above 50%, the highest since March 2020 — 'as goes oil, as goes bonds.'
He flags a paradox: five-year inflation expectations have net declined since the Iran conflict began (from about 2.46% to 2.28%) while yields rose from roughly 3.62% to about 4.30%, a war/deficit premium he expects to prove transitory — and he is taking the under on year-end yields if Iran doesn't spiral.
He reads credit spreads as a sign of complacency rather than safety: BBB spreads near 97 basis points sit in the bottom 2% of their 20-year range despite a three-month uptick, and he sees no cracks in liquidity today — but says to watch single-B versus BBB divergence and repo/SOFR markets as early warnings.
On gold, he argues it is a bet on the Fed: with real rates above 2%, policy is extremely restrictive, so this is not the time to own it — he would wait for real rates to turn down, with gold's direction, like bonds', keyed to the oil price.
He plans by scenario rather than point forecast — prepared for $150 oil, $50 oil, or a drawn-out equilibrium — and says if $110 oil were certain he would add energy exposure, trim other equities and hedge the bond side.

Top takeaway Adam says the third 'shoe' behind gold's slide was Warsh becoming Fed chair and proving his inflation-hawk credentials with a 'whatever it takes' pledge to get inflation to 2%, which markets took as gold-unfriendly since real rates would likely rise.
Lebowitz says Warsh is saying the right things — no QE, preferring to shrink the balance sheet and steer via the policy rate — but cautions these are untested words: 'once you get punched in the face, everything changes.'

Top takeaway Adam says he follows Rick Rule's example of 'saving in gold': money taken off the table that he wants to keep for the long term goes into physical gold.

Top takeaway Adam recalls Fred Hickey arguing in a recent interview that AI's economic model is 'disintegrating in front of our eyes' — if it ever really had one — with companies building the car while driving it at 100 miles an hour.