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Half an hour into the start of US trading, let's get you a check on the markets brought to you by Tasty Trade. Taking a look at the major averages here, a little bit of pressure. The major averages snapping 5 straight days of gains. You got your S&P off about 0.5%. Your tech-heavy Nasdaq taking the majority of those losses here down about 0.1%. The Mag 7 leading those declines so far this morning. But a big factor here, of course, is the bond market. If you can flip the board over you'll see, look at that pop in.OK, you've got your 10 year above 4.5%. It's up about 10 basis points. Your 30 year yield above 5%. That is the highest level that we've seen since 2023, but before that it was since 2007. So just giving you a sense of how rare that has been over the past couple of decades here, and that is a potential headwind for stocks that we're going to talk about throughout the hour. But finally, let's take a look at Bitcoin here. It is down today, down about 1%, still above that 103,000 level.Well, I want to bring in my co-host for the hour. We have Amy Wu Silverman, an equity derivative strategist at RBC Capital Markets. Amy, you always have great insights on the market action, so I'm really excited to have you this morning. We've obviously had a lot of volatility over the past, I, I would say, year to date, I guess, um, are we past the peak volatility at this point or do you see more to come?

It's interesting whenever people ask me this question, I think about how Scott Besson actually called the peak of the Vicks, and I always that made my ears perk up as a derivs person because he said we hit peak volatility and who am I to argue with Scott Besson, but look, I think we're still in for some volatility potholes, you know, we did hit kind of intraday 50 to 60. We might not get back there, but we're relatively subdued and we've been quite subdued for a while, kind of that sub 20 psychological.I think we get a few more potholes from here

and what do those potholes look like if you had the crystal ball for us is it tariff driven uncertainty? Is it other policy uncertainty with this tax plan? What does it looklike?

So I will tell you what's really interesting is over the past week after Trump and Xi, you know, after the China US negotiations for tariffs came down to 30%, you saw the front end of options term structure really drops.Essentially what that means is all this short term uncertainty kind of came out. People breathed a deep sigh of relief, but when you look longer term, kind of 6 months out, it actually got even higher. So people are still buying hedges. They're doing it down the road, and it tells me investors aren't less worried. They've just taken that worry and kind of stored it away for later and that's where I think the vasly pothole comes in, maybe this next earnings quarter or the one.After when you actually start getting the like not the Walmart CEO telling people, look, the prices are gonna start moving up it's more the like, OK, so they moved up and guess what, this is what the consumer did and it wasn't great. Yeah,

I,I think that's such important context for our audience that even if we've had a couple of days of gains, it doesn't necessarily mean all of the pain is behind us. Does it tell you though that at least the tariff risk is somewhat behind investors, or will they continue to remember that?

So one thing I like to think of is to some degree the tail is off the table and what I mean by that is just the really, really bad outcome, the one that I think for some people left them literally frozen, this idea of like 145% tariffs, what do I even do with that, right? So I think the idea of the fact that we kind of negotiated that down now technically it's under this 90 day pause, but I think most investors are pricing it as fully off the table. That takes some of.The catastrophic scenarios off the table, but even 30% is not from a year to day basis not great from where we started. So I think the way when I talk to institutional investors, you know, it's you're hedging for the potential of a recession, but you're not hedging more for that super left tail extreme of a catastrophic outcome.

And I'm curious how you think about the best move forward or the framework that maybe retail should be.Embracing over the next couple of months, the next few quarters, given that institutional positioning and that hedging that you talk about, what do you think retail should be doing?

first of all, I have to give retail a back clap because they had been buying the dip all the way through. It was really the institutional investor base that massively de-grossed, so they're the ones who actually have to catch up right now. What you're gonna see if you're retail with this dynamic is what you have been seeing, meaning there's been this furious rally in the market.Um, some would say a little bit too exuberant, but that was actually the institutional investors essentially being forced to jump back into the pool, um, you know, look for people who have longer term horizons, volatility potholes don't mean you stopped driving, right? But it doesn't mean we won't necessarily see kind of ugly.Outcomes just down the road that I think essentially got hand kicked because of the way these tariffs started coming in these 90 day kind of windows. Yeah,

and it's, it's so well said and I know you talked about in your notes that you sent over to us that retailers started to have benchmark FOMO as tech continued to lead gains. Talk to me about that.

Yeah, so if you think about the pickle that an institutional investor is in, you're ultimately, you, you're an asset manager, you're a hedge fund, you're usually benchmarked to the S&P 500, right? So the S&P 500 goes up 15%, and you went up 5%.That's not great, you know, why am I, you know, then, and, and I always joke that one thing we never talk about is this idea of career risk, which is a real risk, but no one ever says it the way they say interest rate risk or derivatives risk or market risk. But you know, you think about the person sitting in that seat and when the market is so concentrated in a few names like NASAQ is essentially a handful of names. S&P is a quarter of the names.

Sorry Amy, we might be having a little bit of the voice of God coming into our room. I think we're good though. Oh no, we still have voice of God. This is the magic of live TV. We're having a little bit of that, uh, voice of God is what it's called, but Amy, let me go back to you on this. So and and I think that's fascinating. The career risk to hedge funds to portfolio managers, is that a floor for big techstocks? So

it really depends because I think you, you kind of have three ingredients.Now to me that are really interesting because one catalyst that we have coming up soon is Nvidia earnings. It's one, you know, institutional investors missed that first wave up. 2, the tech earnings have actually been relatively resilient when you kind of think about it from the last quarter's context. And then 3, it's when these names move, the entire benchmark moves massively and you have to be part of that or you're gonna lag your benchmark. And sometimes I argue, look, in a day.market people don't necessarily remember if the index was down 15 and you're down 20, but people remember when you dragged 500 basis points on the upside. So I kind of call that benchmark FOMO. Other people have names for it, but it's just this idea that given the concentration risk in the market right now, in particular in tech and AI, folks have to jump in the pool, especially the institutional side. That is

such great context, Amy, and that is why we're so excited to have you for the full hour today. So really appreciate you making the time for us. Thank you so much.The 30 year Treasury yield jumped to a 2023 high on Monday as bonds sold off in the wake of Moody's downgrade of US credit. Here to discuss how officials are reacting. Fed correspondent Jennifer Schomberger. Hi Jennifer.

Good morning, Mattie. That's right. Treasury yields spiking as their prices fall after Moody's stripped the US of its last AAA credit rating, citing large deficits and rising interest rates. Take a look at the yield on the 10-year Treasury this morning, trading around 4.5% in change. I think it was as high as 4.56% at one point, the highest level since April 11th. Now remember that the yield on the 10 year Treasury impacts borrowing.Costs for consumers, namely mortgage rates. So if these higher yields hold, then consumers could see higher mortgage rates. Meanwhile, the yield on the 30-year treasury topping 5%, a level not seen, as you said, since the fall of 2023. White House Press secretary Caroline Levitt held a briefing last hour in which she said the president disagrees with Moody's assessment. She said that the world has confidence confidence investing in the US, citing theTrillions of dollars in investments that the president secured last week in the Middle East and the trillions secured earlier in his administration in terms of foreign direct investment. She also noted that inflation as measured by the producer price index dropped last month. Now yesterday, Sunday, Treasury Secretary Scott Besant called Moody's downgrade a lagging indicator, saying that the US hasn't accumulated this level of debt in just the last 100 days. Elsewhere this.Morning we are hearing from some members of the Federal Reserve who are weighing in on this Moody's downgrade. Atlanta Fed President Rafael Bostic saying of the Moody's downgrade that we have to see how this plays out. He says he doesn't try to target ratings for the US government, but that these things will have implications for prices down the road, and it's something that the Fed will have to pay attention to. Meanwhile, Fed Vice Chair Philip Jefferson, who was actually in conversation with Bostic at aThe conference that the Atlanta Fed is holding down in Florida this morning, saying that essentially the Fed is still focused on its goals of maintaining maximum employment and stable prices and so that the Fed would have to look at the implications of this downgrade as it relates to those goals. Mattie,

and Jennifer, Treasury Secretary Scott Besson also talked about a bit of a warning for US trade partners over the weekend, noting that we could see a return to liberation Day levels potentially. What else can you tell us?

Yeah, essentially, Bessen said that if trading partners are not negotiating in good faith, then they could see their tariff levels ratchet back up to April 2nd levels certainly raising some question marks given how much confidence we were hearing from Besson and the president about.Pending deals with the US's largest trading partners, the so-called largest 15 to 18 trading partners. So this certainly raises question marks about whether how those negotiations are going right now or if this may pertain to smaller trading partners.

Really great overview, Jennifer. Thank you so much for making the time for us this morning.We're gonna have all your markets action ahead here at Yahoo Finance, so stick around. You're watching Catalysts.Now time for some of today's trending takers. This morning we're watching Coinbase, Novavax, and Tesla. First up, Coinbase officially replacing Discover Financial Services on the S&P 500. Coinbase is the first crypto firm to join the index. Here's what CEO Brian Armstrong told Yahoo Finance's Jennifer Schomberger about the inclusion.

Coinbase joining the S&P 500 means crypto is here to stay. It's going to be in everybody's 401k. Um, everyone's gonna have crypto exposure, you know, at least indirectly through Coinbase, which is great.

Stock was up more than 30% last week ahead of the inclusion, despite news of a hack that is expected to cost the company over $400 million. Still here with me to discuss, we have Amy Wu Silverman. Amy, I know you look at the options market when you're talking about individual stocks. What are you seeing around Coinbase?

It's really interesting because I think just what Armstrong had said there is very symbolic of kind of old guard being transferred to new guard um in terms of Coinbase specifically around the options, it's just this idea overall that if crypto becomes normalized, you're gonna really see a change in correlations and what I mean by that is cryptocurrency in general has really been this risk on asset and coin based to some degree has traded along with that correlation, but as it becomes thought of.Or as just a normal part of what people, as he said, have in their 401ks, I think it then people start rethinking its relationship. Maybe it acts like digital gold. Maybe it really is an inflation hedge. We're not seeing those yet, but I do think you start to see investors think of both Coinbase and crypto in general as part of that cohort managing those risks.

Yeah, something of a change to what drives the trade on that stock potentially really interesting. We're going to move on though to Novavax's COVID vaccine getting full approval from.The FDA this after the clearance was delayed when Health and Human Services Secretary Robert F. Kennedy Jr. raised doubts about its efficacy. The shot is cleared for adults 65 and older and those ages 12 to 64 who have at least one underlying condition that puts them at high risk. Of course this comes amid record COVID cases in parts of the globe. You've got the shares up 10%, but Amy, they were up as much as 18% earlier today. I'm interested in why the street sees this as such a big catalyst for Novavax.

Yeah, I think it just comes down to what was priced in prior and then the surprise that they got so perhaps that had something to do with it. I will tell you in general when you think about not only the options for Novavax but UNH for healthcare, it's been incredibly elevated when we look at our liquid universe of all sectors, healthcare has a cross.The board had held the most uncertainty related to what Trump is saying but also related, I would say to just much more idiosyncratic risk related to a lot of these factors like FDA approval or maybe the approval of a trial that you don't get in other stocks.

Perhaps a signal of how much policy uncertainty there is so much in that sector, yes, absolutely really good stuff. We're also.Talk about Tesla leading declines among the Magnificent Seven today. The electric vehicle maker adding a new board member, retired Chipotle CFO. Jack Hartung's appointment is effective coming up on June 1st, but Tesla again leading declines in the Mag 7 this morning is down a little over 2%. This is always a fun one to talk options on. Amy. What are you seeing with Tesla?

So I will tell you Tesla is a name I never want to give up on because when I think back to its options history, it has the most severe form of what we call SKU inversion, but it's a really simple way of saying,I've never seen such exuberance in the call options as I have on a stock like Tesla, and that's faded a lot but we always watch for if that ticks back because that creates an enormous amount of momentum in the stock that you have to be careful of. It happens in Tesla, maybe Nvidia, but not very many names exhibit this the way you see in Tesla.

How can investors monitor that?

So take a look at how the call option pricing.Trades relative to put option pricing when that starts to go kind of above and beyond what the normal relationship of that spread is, then you're starting to see that momentum build in the stock again.

Really,really important context there, Amy. Thank you so much for our audience. You can scan the QR code below to track the best and worst performing stocks with the finances trending Ticker's page. I'll send it over now to Jared Blicky for today's stocks in translation. Hey Jared.

Bitcoin is known for volatility, but there is a new kid on the block making crypto look downright sleepy. Leverage single stock ETFs. Buckle up, the ride just got bumpier. I'm Jared Blicky, host of Stocks in Translation. First up, let us define the trend. A single stock ETF is an exchange traded fund betting on just one stock, often with built-in leverage or inverse exposure, meaning you can use it to bet on the stock's decline. If they're leveraged, a key feature is that there is a daily reset. More on that in a minute.Now let's see how big the party has gotten. This is total assets and leverage long ETFs over the last decade plus. Today over $100 billion are parked in these turbocharged funds. Investors are clearly leaning into risk. Next up, here's a warning sign. This is the leveraged long assets relative to inverse ETF assets going all the way back to 2011. We've highlighted some of the past ratio levels because extreme readings they have.Turning points in stocks. We started 2025 at a very frothy 12 to 1 ratio, briefly retreated as several indices fell into bear markets, but now we're back to 8 to 1. This is a yellow flag waving high for the second half of the year, especially if this ratio goes higher. And the single stock ETF craze is exploding. Volume has ratcheted higher and skyrocketed over the last year. Check out these setups retail and.Active traders have clearly found a new favorite tool. The money is just pouring in, but so is the risk. And here's how much risk we're talking about. Check out the volatility of leveraged single stock ETFs like Super Micro, Pallantir, Tesla, and Nvidia compared to Bitcoin, a notoriously volatile asset. These products make Bitcoin look tame, barely above the S&P 500 and Treasury. Single stock ETFs are the new kings and queens of volatility.And finally, a quick history lesson all the way back to 2011. Back then, the S&P 500 was modestly higher earlier in the year. The, the relatively new, three times leveraged ETF SPXL was up nearly 26% at the highest. Great, right? But then August hit. S&P downgraded US debt, volatility surged, and by the year end, the regular S&P ETF was basically flat to down while the leverage fund lost nearly 15%.That daily reset I was talking about a few minutes ago means leverage ETFs can actually lose a lot of money compared to the market that they're based on, and this tends to happen when volatility rises. And guess what? Moody's just dropped a similar debt downgrade on the US markets today, and they're much more resilient this time around. The markets are. So this is not a bear market call, but certainly an analog worth keeping in mind. And remember, with leverage ETFs, it's not about the destination, but the volatility along the way.Tune into more stocks and translation for more jargon busting deep dives, new episodes on Tuesdays and Thursdays on Yahoo Finance's website or wherever you find your podcasts.

Alright, Jarrett, thank you so much. We're gonna have all your markets action ahead, so stick around. You're watching Catalysts.Buying the dip is paying off for retail investors. New data from investing at Public showing investors who bought the dip between April 3rd and May 9th have earned a nearly 12% return. Here with us now, Life Abraham, public founder and CEO. We also have Amy Lou Silverman still on set with us. Life, it's great to have you here. I'm very excited to get a sense of retail to some degree, winning the first round of volatility under this administration. Talk me through the activity that you're seeing from these investors.

Yeah, thanks for having me.Yeah, I mean like the, the concept of buying the dip has definitely become sort of retail investing culture and like if, if I would kind of look back at it and said, you know, it took for example after the great financial crisis it took I think 5.5 years or so for the S&P to actually recover. Everything basically past that point has been fairly V-shaped in most cases. So if you entered the markets post 208 essentially.You kind of were the trajectory where you've a little bit learned through our time that markets always come back in some regards, no financial advice, but um and and I think that has a little bit like led to this culture of this of this buying specifically,

but it'sa culture that institutional investors did not participate in this round. Talk to me about that bifurcation that you're seeing.

Yeah, I think first off, most retail investors invest for themselves. They invest for.You know their own futures and also a little bit more for the long term and so I think people in most cases end up buying to essentially add to their portfolio. They're not necessarily trading around all the balance, they just add to their portfolio, right? They have income coming in from the paychecks. They're putting them into the markets and so they're just born in this mindset of like I want to compound my money over time for retirement, for my kids' future college or whatever it might be. And so I think that just puts people into a different mindset, right, where you have a bunch of institutions who might.You know, optimize for, you know, Q for bonus time or so on and so therefore you have a little bit more short term thinking I think built into the system than actually most retail investors have in their mind.

For, for the investors who you see on your platform, I, I feel like generationally there's just more savvy with regards to options. I mean, do you think that's true and what kind of options strategies do you see them doing these days? Is it leveraging by the dip or is it hedging or something else?

Yeah, interesting. um, so yes, first off, options have definitely become way more popular with retail investors over call it like the last decade even right over the last 5 years specifically, and you see that in the volumes as well, right? I think you know options volumes have obviously increased over time a lot. Um, I think we kind of see two different types of investors. We see the speculative type who will end up also just going in, you know, 0 days and so on.Um, that's obviously, you know, fairly risky and fairly risky endeavor, and there's a whole culture around that obviously also just generally like on the internet and so on. But the other thing I think we're also seeing is specifically uh options strategies for income generation and so you know we actually build a whole feature just on income in the app, for example which is called the income hub where you can see.You know what's the income you're making for strategies you can see what's the income you're making from fixed income and you know, interest of, you know, high yield cash and so on and we've built that because there's this whole online culture on retail around income generating strategies through dividends through fixed income and even options.Strategies as well,

especially as people want to become a little bit more work optional increasingly I see a lot of popularity around that on social platforms. Uh, to what extent are you able to suss out how much investors are winning versus losing when it comes to those high risk strategies? Like how much money are they making versus potentially losing?

I mean, honestly, they obviously completely depends on the investor and whatnot, and you will always find people who are fairly, you know, educated, uh, like about what they're doing.And who are also like deep in the options strategies in terms of you know understanding you know that you know uh essentially like over time you might be you know kinda kinda you know push off the markets and holding it along, etc. etc. and so like there are people who are fairly educated about it you also find people who will just like follow trends and that's a risky type that happens as well of course too.Um, but generally speaking, I think it's also a little bit tied to market cycles and so one thing we saw for example with this recent volatility is that if the volatility like, uh, basically happens too long, then at some point even a retail investor will kind of just throw their heads into the like throw their arms into the air and be like I don't know if this is going left, right, up or down, and so I'm just gonna pause right now.And especially in terms of options traders, I think that's what we've also seen so you know for the like more speculative short term trading that's happening in options sometimes, um, that is also a little bit like where people have like where it's driven by people having a general macro feeling of where the market is pointing at.

So you had mentioned earlier that there is a little bit of this culture of by the dip and it kind of made sense post 2008, right? Like the buying the dip as a strategy has worked. Do you think there's anything that fully shakes retail out of that? I mean, essentially, is there anything scary you think from a macroeconomic perspective that could happen where you think that shifts culturally to something else?

Um, not sure. I would say by now, especially for the generation that basically entered after 8 and even that entered I would say through the last five years, they've experienced so many market cycles right from the COVID dip to interest rate hikes to.Interest rate cuts, you know, etc. etc. to multiple trends that are happening now with AI or you know with the whole COVID stock kind of bucket with work from home, uh, tools and healthcare and so on and so they've been through so many cycles so quickly and I think whenever a cycle happens it's like a moment of mass education for retail and so there has been a lot of education just that happened throughout the last, you know, uh uh few cycles and I think that sticks with people generally speaking.Um, and so I don't think that there's necessarily like, you know, something major that would happen that suddenly, you know, make people kind of freak out and like stop the, stop the dip buying. I think the only thing you could see is like if there is a massive dip happening and the recovery.You know, suddenly takes as long as in a where suddenly over multi years and you still do not see the S&P go up, you might see some people who will become more cautious, but generally speaking, I feel that this mindset of buying the coming from people investing their income, which means you also have new cash coming in there waiting to deploy.Um, and so I think that culture is gonna continue to stick around

off of that, Amy, I'm curious from your perspective, did retail win this round because it was so short, because it was only a month?

Yeah, I mean, if you, if you're using April 2nd, I would say as your bogey, then retail stuck to that buying the dip you saw it in positioning data, whereas you had seen a massive degrossing institutional basically since the beginning of January.And they're the ones who had to catch up. You could arguably say that they fueled a little bit of this rally higher because they had to jump in so quickly, uh, to kind of regrowth essentially because we had taken a very large tail off the tariffs from 145% to 30%

there was actually a great meme that I saw online which was this little, this little uh uh uh.Still from this from this movie with like the Somali pirates and what's kind of like looking at them is like look at me I'm the captain now and I was like that look at me I'm the smart money now and so

but yeah but and that's an important thing, right? Like this is, you know, we were just talking beforehand about 5 years ago we would've been talking to you about GameStop and the dumb money and now you know.If retail continues this activity, it's an interesting lesson. I do want to end life on something we were talking about regarding social media. It was very easy to go viral on TikTok over the last month by telling people to stay invested in the market. What can you tell us about how much the content that we see online from influencers actually leads to dip buying activity from retail?

Mm, I don't know how much it leads to uh to to to dip buying, but I would say that social media has had a massive impact on this like mass education and just the the the rise in financial literacy and just the fact that through social media you now have niche communities that can be massive right back to dividend investing which I would.Argue it would be a fairly niche topic and where I'm personally always like how much can you talk about dividend investment but generally speaking, but apparently a lot and there's massive, literally millions of people who follow YouTubers and whatnot in communities around these like income strategies and dividend investing online and I would argue it's a fairly niche, uh, uh, uh, like a, like a fairly niche topic and so that those niches can exist.And that people can find, you know, these things to latch on and that they're so more like bite size and so on I think has had a massive impact on financial literacy and that generally just makes people more confident in their own abilities and because they are confident in their in their own abilities.That makes them act more calmly when markets are rocky and so on, which leads to things like the buying.

Yeah, it's gonna be really interesting to continue to monitor that activity going forward, so we're excited to hopefully have you back and hear more about how retail is doing. Thank you so much for joining us. Appreciate it. We're gonna have all your markets action ahead, so keep it here. You're watching Catalyst.A House committee advanced President Trump's massive tax cut bill over the weekend. As it stands, the current bill would boost projected budget deficits by nearly $3 trillion through 2034, according to The Wall Street Journal. This comes as Moody's slashed its rating on US credit, citing the federal government's growing budget deficit. Jessica Riedel is a senior fellow at the Manhattan Institute, a conservative think tank, and she recently wrote an op ed titled I'm a conservative economist.Reasons Trump's plans won't work. She joins us now. Jessica, it's great to have you on here, and I really wanted to get your specific perspective on the administration because of that exact headline you calling out I'm a conservative economist and I don't think this is going to work, but I want to start on today's news with the debt ceiling, an issue that you've been flagging for decades. It hasn't become this zombie issue yet. Is this time different?

Ultimately, I think Congress is going to raise the debt ceiling at the end of the year, um, because Republicans don't even seem to care anymore, but this tax bill's enormity is being underplayed. Um, if you take out the expiration dates, which even Republicans say are, are not real, this tax bill will cost more than the 2017 tax cuts, the Pandemic CARES Act.Uh, Biden's stimulus and the inflation Reduction Act combined. It would add $6 trillion over 10 years to the deficit. Ultimately, my projections showed deficits heading to about $4 trillion a decade from now, uh, if this bill is passed, combined with the baseline, and even higher if interest rates rise, and we've seen that interest rates are rising.

Well, Jessica, talk to me about the, the kind of growth side. We've been talking a lot this morning about the risks when it comes to the deficit, but I'm curious, is there a potential pro-growth narrative to come from the tax bill that maybe markets are mispricing that we're missing?

I'm not sure what in this tax bill would create faster economic growth, and as a matter of fact, the tax foundation.Uh, did an economic analysis and found that it really does not significantly increase economic growth because the pro-growth parts of the tax cuts, such as business expensing, making it easier for government to write off investments are temporary and expire in a couple of years, but the other things like no taxes on tips, no taxes on overtime, that's not really pro-growth um economics.And a lot of the rest of it is just continuing current tax policy, renewing the tax cuts. But again, the pro-growth stuff is going to be expiring in a couple of years. Um, it probably won't expire, as I mentioned earlier, but it does create uncertainty for business investment while the stuff that doesn't help it goes long term and ultimately the economic growth angle is really endangered.By tariffs, by the size of the workforce dropping, by Trump telling the Federal Reserve not to raise interest rates, um, it's, it's, it's gonna be a challenge.

And Jessica, my guest host Amy Wu Silverman has a question for you as well.

Hi Jessica. So I actually want to ask you to go back to kind of this idea of there being exemptions on overtime and on tips. I feel like that's something.Uh, Trump had talked a lot about on the campaign trail, and right now from a macro data perspective we've seen really bad consumer sentiment kind of like down in down in the dumps and you know something like that passes, do you think it gives a turbo boost to sentiment that could in a way, you know, offset all the bad news we're getting from tariffs and maybe that does down the line hit hard data, or do you really think that it's still not going to have any impact on the growth level?

I think if you look at the design of no tax on tips and no tax on overtime.They're they're more limited and ultimately not enough workers work in tipped industries right now. I don't think for it to be a game changer. Same with overtime, it's pretty limited. Of course that may change if people redesign their jobs to be paid in tips, but ultimately, I don't see it being as big of a game changer compared to the wet blanket on the economy tariffs are providing. I think if we want to get rid of the economic effect of tariffs, we should get rid of the tariffs.

Well, let's talk about the tariffs, Jessica, before we let you go, and I, I want to bring back your headline from this political piece. I'm a conservative economist, but you're not seeing these plans working. When I've spoken with other conservative economists, they've talked to me about boosting American jobs, increasing and bringing us back to a manufacturing economy. What issue do you see with

that? Right, tariffs can't both.Bring home manufacturing like Howard Lutnick said, we're going to have American fingers putting the screws in the iPhones, but then also just be a negotiating tool when Trump turns the dials back. Um, businesses need investment. Businesses need certainty. And if the tariff dials are going up and down, if Trump is going to pull back the tariffs as soon as they're tanking the market and say.It was just the art of the deal. Then ultimately you're not bringing back manufacturing, you're just creating chaos because you're not giving businesses the certainty and predictability to reshore manufacturing.

Jessica, really great overview. Thank you so much for making the time for us this morning. Appreciate it. Thank you. We're gonna have all your markets action ahead, so keep it here for more. You're watching Catalysts.

They're embracing us as opposed to chasing after us, uh, and prosecuting us, uh, and now we're getting legislation and so, you know, it's a huge tailwind for the industry, not just for Galaxy, but the whole industry, but, and we plan on taking advantage of it.

That was Mike Novogratz of Galaxy cheering the changing regulatory regime for the crypto industry, which could see even more changes as soon as today. Stablecoin legislation is expected to clear the Senate this week. Stablecoins underpin most of the $3.3 trillion market for Bitcoin. The so-called Genius Act would require stablecoins to hold reserves of liquid, safe assets like Treasury bills. Isurers would also have to follow.Money laundering and terrorism finance rules and to give holders of coins priority to recoup their money in the event of a bankruptcy. Joining us to break down what this means for the broader crypto space, we have Kavita Gupta, Delta Block, Jane Fun, founder and general partner, and still with me is Amy Silverman of RBC. Kavita. Great to have you on this morning. Talk to me about the stablecoin legislation and what it signals specifically for crypto investors.

Thank you guys. Um, I think it's a very first good start move with this administration, especially because it's a bipartisan deal where we are saying, hey, let's legalize having stablecoins, but let's put very strong and very good uh positive and very structured, uh, rules around it that hey, if you want to issue stablecoins, you have to hold treasury bills, you have to have some sort of a collateral to support that you're not gonna disappear. Also at the same time.There is a certain sort of transparency and accountability around it which people can check what sort of a percentage, a percentage of Treasury bonds do you have. We have seen that trend which has been questioned by SEC 2 years, 3 years back, uh, by T3 and Circle and different uh secure different Treasury bills, uh, circulations, and I think that accounting has always been a question what is acceptable or not acceptable. So finally having a very positive structured.Uh, rules and regulations around the uh around stablecoin is, I think is a very big path forward and is a big crypto.

Yeah, and I wonder from your perspective too about the dissolution of some of the headwinds to the bill. The two main ones that I've heard come up are big tech companies issuing their own stablecoins, which seems to have been a headwind that has resolved itself. But then the other concern is the president profiting from crypto specifically. How are you thinking about that as a risk to the legitimacy of crypto going forward?

I think when we think of stablecoin, it is not a crypto which anybody or any token like Solana or like any of the 2000, 10,000 tokens which we have any private company can just go issue and create a value associated with it. We have to put stablecoin in a different basket. Stablecoin are US or European or Indian, like whatever currency you take, it is a government issues currency backed and it is pegged to it one is to one. So I think it is very different thanTwo issues which you highlighted. The first issue which you highlighted is very clear that can private companies like Meta or Square or any other uh tech finance company can issue their own coins? Yes, they can. They can do the stablecoins with the right regulations, but that is also very similar to digital payment system which we are already using when I do Venmo, I'm using digital payment system. Um, can they do their own crypto? That is not in the stablecoin basket. The other question.That you asked about President Trump's benefiting from it. I think if it's a stablecoin payment system, it's a, it's a, it's a fair game. Anybody and everybody can do that. But if it is about launching your own crypto, again, that's a different basket, and if it's a conflict of interest where the president knowing everything, what regulations are coming, is participating in a financial deal, then yes, it is a very clear conflict ofinterest.

Yeah, and just zooming out beyond stablecoins, just a crypto in general, Kavita, can you talk to me aboutHow that potential conflict of interest reads into consumer sentiment, investor sentiment around crypto, and I guess is that a potential headwind in your view to a wider adoption of cryptocurrencies?

Itis, it is a big, uh, it is a big question. I mean, on one side, I want to look at it positively, saying that we are seeing the biggest, like the president, the first president of the United States who was very positive about blockchain and crypto, is actually having his extended family participating.Uh, in creating a lot of products around it and having commercial financial uh interest into it. So is that a positive long term vision around it? Yes, but at the same time, if it stays within the extended family without having any conflict of interest from the government position, that is much better because when we start seeing this as a tool of short term benefiting by people in power, which could be anybody around the world,Of course, the investors start thinking that this is also going to come down heavily by the opposition who may be in power in the future, and that is not a sentiment that does create volatility in the market which we are seeing even though that the government is so pro crypto, but the market is not showing that strength and interest for the investable dollaramount.

Kavita, really appreciate you joining us. I hope you'll come back when we've got a little bit more time. Thank you so much for your insights.President Trump is set to host a dinner this week for the top holders of his Trump meme coin, with the top 25 holders receiving additional perks, including a VIP tour of the White House. The announcement led to a significant surge in the token's value, with its price jumping over 60% in one single day. However, the event has sparked widespread criticism from ethics experts and lawmakers who raised concerns.About potential conflicts of interest and the monetization of presidential access, critics arguing that the dinner and the Trump token structure raised questions about centralization and potential manipulation. Additionally, the involvement of foreign investors, including Chinese crypto billionaire Justin Sun, has drawn scrutiny over possible foreign influence and national security concerns as well.Still here with me we have Amy Wu Silverman of RBC. Amy, I, I'm curious how you're thinking about crypto in this moment and just the impact that it has on investors.

Look, I think it is without a doubt true that first there's just this wave of adoption that I don't necessarily think will go away, and second, you know, that institutional adoption continues to grow. And so this sounds kind of funny, but one thing I like to watch for is what is the correlation of crypto? So maybe Bitcoin.Uh, versus S&P or Nasdaq over time. And the reason I asked that is, does it still behave like a risk on asset, like all the other assets, or is it actually starting to be what it initially had purported to be, which is an inflation hedge, a digital gold, um.When you see that relationship start to invert from this risk on asset, then I think it's starting to do what the initial founders perhaps thought of when they thought of crypto.

Really great overview and great overview in general. So many thoughts from you on thinking, uh, through the market today, Amy, thank you so much. We're gonna have wealth for you here next. Stick around.