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The Real Eisman Playbook · 3 min · Oct 19, 2026

Small Fed and Treasury moves cannot offset the debt backdrop

Danny Moses · Host, On The Tape

Danny Moses argues that the Fed and Treasury cannot override a market this large, while debt and stimulus keep rates structurally higher.

In this episode

Full analysis
  1. 16:50AI financing echoes the warehouse lines behind subprime4 min
  2. 22:38Private equity's fundraising model is colliding with exits6 min
  3. 5:04Small Fed and Treasury moves cannot offset the debt backdrop3 min
  4. 8:30Equity wealth now poses more economic risk than housing2 min
  5. 11:05Real AI demand does not guarantee profitable infrastructure3 min
“Raising a quarter point here, stopping, cutting a quarter point here, buying $20 billion worth of 10, it's an ant.”
Danny Mosesat 8:00 · The Real Eisman Playbook
8:00

Takeaways

  1. He says Treasury bond buying is too small to steer the long end.
  2. US debt rose from $8T to more than $40T after the GFC.
  3. He sees structural pressure keeping rates higher for longer.

About this segment

Danny Moses argues that the Fed and Treasury cannot override a market this large, while debt and stimulus keep rates structurally higher. The figures show why small rate moves may not change that backdrop.

Danny Moses

Danny Moses is a former Big Short partner and host of On The Tape.

Spotted the housing bubble before the crisis and helped execute the trade chronicled in The Big Short.

From “Big Short Reunion w/ Danny Moses: Rising Rates, AI & Private Equity | The Real Eisman Playbook Ep 80”, Oct 19, 2026. Watch the full episode

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

  1. 5:08

    Give me your thoughts, because I got thoughts, you got thoughts. We'll start with yours. Fed raised rates. Do you think they're going to raise more? More importantly, Besant pulled this whole twisty twist thing, where he issued short-term bonds to buy long-term bonds to try and drive down long-term rates, which only caused long-term rates to go higher. Just give me your thoughts about this whole stuff that's going on in that part of the market.

  2. 5:33

    You know, it's amazing. Nobody's bigger than the market itself. It doesn't matter if it's the Fed trying to control the short end or if the Treasury trying to control the long end. It's too big of a market. And you and I both know, if everyone knows your position and what you're going to be doing, your hand is out. So, as far as betting against the House, we wrote a piece on our sub stack, counting cards, basically. You could count cards right now and figure out what the dealer has, Treasury. You know what they're doing, they've told you. But it's too small and it's ineffective.

  3. 5:59

    It's more symbolic in nature. So, that's the part to deal with best in the Treasury. As far as the Fed goes, if you're truly an inflation hawk, we would want the Fed to raise rates short-term to control the longer end of the curve, right? Because that's what it's supposed to happen in our economics class, right? It's supposed to happen. So, I don't envy either of their positions that they're in right now. Obviously, the higher oil, at some point, hopefully, there's peace of some kind in the Middle East and oil comes down. And then the assumption will be that inflation will come down. But we're running. We've moved the goalposts from that 2%.

  4. 6:31

    number to the three. As long as it's going towards two, we're okay. But the cost of living is going up faster than wages. And we're in a cycle now. This feels like a much more secular than cyclical cycle as far as where rates, because rates were so suppressed for so long. And so you and I lived through, held hands at some points, and literally holding hands in 2008. And when you think about 2008, what did we do? We never solved the underlying problem. We transferred the debt to the government balance sheet. I know you've talked about this before. And rates were, you know, we went to zero on rates. And the Fed's balance sheet went from, you know, from zero to $9 trillion in a straight line through COVID, obviously, some things that came. And now it's sitting at $6.7 trillion. And the debt on our balance sheet in the U.S. went from $8 trillion

  5. 7:19

    to where it sits here to over $40 trillion. And so, rates higher, debt higher. Quite an impressive move, by the way, to go from $8 trillion to $4 trillion. Amazing. Can you imagine being long that? What an accomplishment. Yes. How do you go long that? I wish I knew. Exactly. So, when you think about nominal growth and real growth in the economy, it's been physical and monetary stimulus that has been really what's been driving everything to a degree.

  6. 7:39

    And so, back to your original question, when you start to do things or you're forced to do things that are supposed to kind of rein that in a little bit, whether it's debt, whatever it might be, whether it's inflation, get things under control, no party wants to deal with this. No one wants to stomach it. And so, again, I don't envy the position, but I think the course is set. And I don't think anything that they do right now will have any impact.

  7. 8:03

    Raising a quarter point here, stopping, cutting a quarter point here, buying $20 billion worth of 10, it's an ant. I agree with you. The level of underlying rates is going to be higher for longer. The fact that $500 billion of AI issuance is taking place this year is crowding out. The statement that something in the private sector is so large that it would actually crowd out treasuries has never happened before, but it's that big.