Speaker · Updated
Steve Van Metre: latest market views
Steven Van Metre Financial
Summary
Steven Van Metre is a CFP® and president of Steven Van Metre Financial who hosts the macro YouTube channel 'The Macro Show' and is known for a long-running deflationary, bond-bullish macro thesis.
Chorus has 24 views from Steve Van Metre across 4 episodes on Eurodollar University since October 5, 2026. Their latest calls: bearish on Meta Platforms and Oracle.
Where they stand
Their latest bullish or bearish call on each company.
- Meta PlatformsBearish ·
- OracleBearish ·
What they talk about most
The latest views
Newest first. Every quote is checked against the episode's transcript.
Airlines cannot pass fuel costs to consumers, so they are cutting unprofitable capacity.
Van Metre argues that when airlines say they are absorbing higher prices, it is not because consumers can afford them. Airlines know what each seat costs, and raising fares about 10% would leave empty seats. Their response is to cut capacity and drop unprofitable flight legs. He notes that much of the earlier travel demand was prepaid before fuel prices rose, which supports the view that the margin squeeze is real.
“when you start hearing a business say, we're trying to absorb higher prices, it isn't because consumers can afford it.”at 2:30
Eurodollar University: Airlines Just Sent a TERRIFYING Warning About the Economy ·
Energy-shock recessions may avoid mass layoffs, with attrition and buyouts doing the job.
Van Metre notes that prior recessions usually showed warning signs in job openings, wage growth and initial claims, and that these are largely absent now. He suggests this energy-shock downturn could be the first in a long time without mass layoffs. Instead, companies may shed expensive older employees through attrition and buyouts, then hire younger workers at lower pay. This would hide the weakness from unemployment statistics, though spending would still fall as wealth effects reverse.
“This could be the first one we've seen in a long time that we don't see mass layoffs unless something really significant breaks along the way.”at 14:55
Eurodollar University: Airlines Just Sent a TERRIFYING Warning About the Economy ·
Strong retail sales headlines overstate consumer strength; the spending is narrow and gasoline-driven.
Van Metre argues that outsized retail sales prints are heavily skewed toward gasoline, yet Wall Street reads the headline as proof that consumers are resilient. He says the broader spending base is narrower than the headline suggests. Once consumers in the US and abroad start to pull back, credit spreads will start to matter, because bondholders will begin to doubt that debt gets repaid.
“Wall Street looks at the headline numbers. It's, look, everything's... okay. Consumers are spending. They're resilient.”at 19:15
Eurodollar University: Airlines Just Sent a TERRIFYING Warning About the Economy ·
Credit stress from weak consumer spending could spread up the ratings ladder, from CCC to AAA.
Van Metre argues that credit stress is not yet visible in investment-grade spreads, because spending is still holding up. If consumer spending pulls back, bondholders will question whether debt gets repaid. He compares the spreads to the Jenga tower in The Big Short: one tranche fails, the next one follows, and eventually even AAA is affected. He expects spreads to widen across BB and possibly into A as people question whether the resilient economy and high rates can coexist with high energy prices.
“This tranche goes bad. Well, then the next one's probably going to go bad. Then somehow you get down to AAA.”at 19:58
Eurodollar University: Airlines Just Sent a TERRIFYING Warning About the Economy ·
Energy shock will last: refilling inventories keeps prices high even if Hormuz reopens.
Van Metre argues that even if the Iran war ended and the Strait of Hormuz fully reopened, rebuilding supply would take a long time. He cites energy company CEOs who say their priority is refilling inventories, not cutting prices. He concludes that consumers now expect high energy costs to persist for a long time, which is why behaviour has changed.
“it's going to take quite a long time just to get things built back up. And we've been hearing from CEOs of a lot of the big energy companies saying, look, our priority as things come back online is refilling inventories. We're not interested in lowering prices.”at 6:41
Eurodollar University: Gas Stations Just Confirmed the Worst-Case Scenario for the Economy ·
Auto demand is drying up as higher rates make car purchases unattractive after the pull-forward.
Van Metre says the August auto buying spike reflected households expecting energy costs to last, so they downsized gas-guzzling trucks, and EV sales jumped. He then argues that auto demand is now fading because higher interest rates make car financing unattractive, so the earlier pull-forward is stopping. He sees this as a sign that consumers are cutting back on larger purchases.
“not only the auto market, you see all of sudden that drying up as people who's, as you said, would buy a car, but because of higher interest rates, it makes no financial sense.”at 11:31
Eurodollar University: Gas Stations Just Confirmed the Worst-Case Scenario for the Economy ·
Consumers shifting from spending to saving and debt paydown is the inflection that will hit jobs.
Van Metre argues that as the economy slows, households cut everything they can and then prioritise savings and paying down debt. He says that mindset shift from consumption to saving is dangerous. He sees it as the inflection point: once consumers say they have had enough and inventories are full, the labor market starts to take a hit.
“We're talking about the inflection point. That's the biggest one is when consumers say, look, I've had enough. ... next thing you know, that's where we see the labor market start to take a hit.”at 15:17
Eurodollar University: Gas Stations Just Confirmed the Worst-Case Scenario for the Economy ·
Labor market is weak, with hourly earnings decelerating and firms not hiring because demand is missing.
Van Metre says the boss does not want to hire because demand is not there, and the retail sales data had hidden that. He points to decelerating average hourly earnings, which means workers who still have jobs are not getting raises, so their spending cannot keep up.
“And on top of that, you know, those who do have a job, what do we continue to see with them? Decelerating average hourly earnings. They're not getting the pay raises, their spending's not keeping up.”at 18:11
Eurodollar University: Gas Stations Just Confirmed the Worst-Case Scenario for the Economy ·
Energy shock, high rates, a collapsing yield curve and weak jobs threaten a credit bubble.
Van Metre lists the shocks the economy faces over the coming months: an energy shock, high interest rates, and a yield curve that is collapsing and could threaten to pop a credit bubble. He pairs these with a weak labor market. He presents the combination as the main risk to the economy.
“We've got high interest rates. We've got a yield curve that's collapsing that could threaten to pop, you know, a credit bubble. And you've got a labor market that is completely weak.”at 18:11
Eurodollar University: Gas Stations Just Confirmed the Worst-Case Scenario for the Economy ·
Enterprise AI adoption & AI software
AI demand looks weak: once users build a tool, they stop needing the AI, so repeat usage is limited.
Steve asks who will use all the data centers being built, noting that when people try AI they get an answer and do not need to use it again. From his own use, once a program is built, you do not need AI to change it, so the expected restructuring of businesses and households does not show up. He reads this as too much capacity against weak demand.
“And the problem is when you do use it and you get the answer, you don't need to use it again.”at 1:48
Eurodollar University: OpenAI's Money Problem Is WAY Worse Than You Think ·
AI infrastructure & data centers
The AI buildout has too much capacity and too little demand, echoing the .com bubble.
Steve says companies keep building data centers while claiming infinite demand, but users find they do not need the tools after the first use. He argues the spending is funded by borrowed money and that the situation looks just like the .com bubble. He says there is too much capacity, not enough demand, and a lot of hype.
“again, too much capacity, not enough demand and a lot of hype, and everybody's just so invested in it.”at 3:12
Eurodollar University: OpenAI's Money Problem Is WAY Worse Than You Think ·
Payrolls have gone nowhere since mid-2024 and could turn negative in the next month or two.
Steve says the labor market has gone nowhere since mid-2024 and payrolls could be negative in the next month or two. Hourly earnings keep declining, and consumers say conditions are getting worse. With high gas, consumer and food prices, consumers cannot sustain spending, so if the AI bubble pops later, job losses would hit a weak economy.
“[Since] mid twenty twenty four, it's gone nowhere and looking like payrolls could be negative in the next month or two. Hourly earnings continue to decline.”at 6:09
Eurodollar University: OpenAI's Money Problem Is WAY Worse Than You Think ·
The bubble is unlikely to pop soon because investors have no alternative to long tech and hyperscalers.
Steve argues the bubble does not look likely to pop soon because investors seeking a large return have only one answer, going long tech stocks and hyperscalers. Past bubbles had an immediate impact only once the broad economy weakened, and this one is staked on AI while the labor market and consumer are fragile. A later pop would therefore hit at a dangerous time.
“it doesn't look like that's gonna happen this time. ... The really only answer is you've gotta go long tech stocks and hyperscalers because there's really your only hope right now.”at 6:09
Eurodollar University: OpenAI's Money Problem Is WAY Worse Than You Think ·
Retiree spending depends on the stock market, so the AI-driven rally is holding up the consumer.
Steve argues that AI spending itself does not contribute much to the economy, but the stock market does, because the wealth boomers create leads them to spend more. He observes that retirees spend freely when the market is up and stay home during corrections, so boomer spending is a huge part of the economy.
“the AI spend itself isn't contributing to the economy, but the market is because the more wealth these boomers create, the more they spend.”at 11:12
Eurodollar University: OpenAI's Money Problem Is WAY Worse Than You Think ·
Bank lending is surging on AI, but the concentration in a few hyperscalers is a growing risk.
Steve says banks would not be lending at this pace without AI, and that lending is concentrated because banks have few other borrowers. He notes that if the hyperscalers cannot repay, their only real option is issuing more stock, so the banks end up with too much concentration. He also links the risk to the yield curve: if long rates rally and the curve flattens, banks may stop lending to AI companies.
“If it wasn't for AI, they would not be lending at this pace.”at 12:01
Eurodollar University: OpenAI's Money Problem Is WAY Worse Than You Think ·
Meta PlatformsBearish
If Meta cannot raise AI capital, its profitable core free cash flow will go to debt service.
Steve argues that if companies like Meta cannot get the capital or generate revenue from mass-market AI, free cash flow from the profitable parts of the business will have to go into debt service. They cannot simply give up on AI after building the data centers and software, so other resources will be diverted, and sacrifices will follow.
“all of a sudden, free cash flow will take meta from their profitable side of their business, has to go into debt service, but they still can't give up.”at 18:42
Eurodollar University: OpenAI's Money Problem Is WAY Worse Than You Think ·
Market gains depend on 8-10 companies, so money will flow out of them the same way it came in.
Steve says most inflows are going into eight to ten companies, and market-cap-weighted indices keep that concentration in place. Investors have few options beyond those few names. If something goes wrong, especially a credit cycle break, the money that flowed in will flow out along the same path, leaving the market exposed.
“If all the money is flowing into 10 companies, it's gonna flow out in the exact same path.”at 19:08
Eurodollar University: OpenAI's Money Problem Is WAY Worse Than You Think ·
Reported AI-era profits may overstate reality once off-balance-sheet debt is counted.
Steve says profits were supposed to be rolling in from AI projects completed this year or early next year, but they are not. He suggests that what looks like profit now may not be real once investors learn about off-balance-sheet debt. As a result, the bubble could burst when panic spreads and everyone sells.
“what we're seeing as profits now may not really be when you find out about all the off balance sheet debt.”at 19:08
Eurodollar University: OpenAI's Money Problem Is WAY Worse Than You Think ·
OracleBearish
Oracle's credit default swaps show the market doubts it can pay its AI-related debt.
Steve points to the triple C credit space and credit default swaps as signs of stress, singling out Oracle. He says the CDS market is effectively saying we are not sure how you will pay on this debt. He uses this to ask how a bubble bursts and how the credit cycle plays out for AI borrowers.
“you look at Oracle, I mean, which is just an absolute, like, flaming trash truck of the market saying, look. We're not sure how you're gonna pay on this debt.”at 19:28
Eurodollar University: OpenAI's Money Problem Is WAY Worse Than You Think ·
Investors are right to exit private credit: if the economy slows, they may not get their money back.
Van Metre argues that private credit loans are backed by receivables, payables and inventory, so their value depends on businesses and consumers. As the economy slows, wages grow more slowly and prices rise, investors start to doubt they will get their money back. Private credit is not liquid: investors have to ask for withdrawals each quarter and can be cut off when the door closes. He concludes that investors are trying to get out before losses appear, even though the manager says everything is fine.
“And we know investors want out of private credit. ... And we're starting to wonder now, are we going to get our money back? Because if things slow down, yeah, we're getting a really great coupon.”at 2:05
Eurodollar University: Private Credit Investors Want Their Money Back… And It’s Getting Worse ·
Diesel-driven energy shock will squeeze small and mid-sized businesses that cannot pass costs to customers.
Van Metre says corporate profits look strong in backward-looking data, but profits have historically fallen during energy shocks. Rising diesel prices hit small and mid-sized businesses hardest, since they cannot raise prices to customers who cannot afford them. Factory price surveys show rising prices, but he doubts consumers can absorb them. Investors now expect the shock to last at least a few months, not fade quickly, so these businesses face a margin squeeze and possible loan defaults.
“So the issue comes is when you get a spike in diesel prices, what do businesses, particularly the small and mid sized ones, what do they have to absorb? That rising increase in price at their margin. They know they can't pass it on to their customers.”at 6:55
Eurodollar University: Private Credit Investors Want Their Money Back… And It’s Getting Worse ·
The bet on the American consumer is about to fail as squeezed spending, drawn-down savings and weak jobs hit.
Van Metre says private credit investors are worried because consumers are being squeezed. Wage growth is slowing and prices are rising, with energy and food costs going up. He says the strong retail sales report was a one-off that does not show a trend. The personal savings rate is falling because consumers have been drawing down savings in hope of a recovery. With net zero job creation over two months, he expects weak holiday spending and then layoffs after the season.
“It's because they realize their bet on the American consumer is about to go bust.”at 10:52
Eurodollar University: Private Credit Investors Want Their Money Back… And It’s Getting Worse ·
Fed rate cuts would do nothing now because the economy is being held up by manufacturing and AI spending.
Van Metre says the policy options are limited. Rate cuts would not do anything because the economy is being held up, with manufacturing production and AI-related activity in the data. He says this support is not feeding through to jobs. Separately, he criticises the narrative that strong retail sales should push the Fed to hike, arguing the economy is weaker than that story suggests.
“Fed rate cuts? Are they gonna really do anything right now? No. Not gonna do anything at all because the economy is really being held up.”at 13:33
Eurodollar University: Private Credit Investors Want Their Money Back… And It’s Getting Worse ·
Bank stocks falling while rates rise is a warning that consumers are squeezed and delinquencies will rise.
Van Metre says higher rates usually help banks because they earn more on the spread. Bank stocks fell anyway while rates rose. He reads that as the market saying the economy is heading the wrong way. Consumers are squeezed by rates, energy and food prices, which will lead to rising delinquencies. Higher net interest income is worth little if loans stop being repaid. He ties this to investors pulling out of private credit.
“But what's going to happen if bank stocks continue to drop, it's a warning that the economy is going the wrong direction.”at 18:04
Eurodollar University: Private Credit Investors Want Their Money Back… And It’s Getting Worse ·
Shows
- Eurodollar University · 4 episodes
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