Ben Hunt of Epsilon Theory, who measures how loud financial-media narratives get and what they mean, tells Matt Zeigler on the Last Call monthly wrap that the story he was tracking a month ago has completely reversed. The narrative that the Fed is losing credibility exploded after Kevin Warsh's July press conference, and Hunt lays out why he thinks it does not come back, what it has done to gold, and the four problems the Fed and the Treasury now have to solve without it.
👤 Guest: Ben Hunt, founder of Epsilon Theory
🎙️ Host: Matt Zeigler
📰 Published: 30 August 2026
🔴 YouTube | 🟢 Spotify | 🟣 Apple Podcasts | ⏱️ 63 min | ✅ Time saved: 55 min
Key Takeaways
The Fed-losing-credibility story went vertical after the July press conference
"It's gone just supernova in a way that I really haven't seen in looking at narratives in a long, long time."
Hundreds of independent stories, in different words, saying the same thing
The damage was self-inflicted, and it was about what Warsh said rather than what he did
"It's like an own goal. This is self-inflicted."
Gold's August move is the price of that broken trust
"It's one divided by trust"
One 25-basis-point hike would have settled it; three will not
"once you hike by 25 basis points you never have to hike again"
Credibility is a teacup — it can be glued back together and it is never the same
The narrative measure reads meaning, not sentiment
"We're not looking at word counts or sentiment scores"
Bessent's buybacks and the plan to sell euros for yen are read as the same story
Jawboning rates rather than letting the market decide
Four problems now have to be handled with damaged credibility
Iran and oil, the fading fiscal stimulus, the insurance sector, and 10-year and 30-year rates
Hunt sees no end to the financial repression, only an acceleration
The Story He Was Tracking a Month Ago Has Completely Reversed
Zeigler introduced the segment as the monthly update on narratives and markets. Hunt opened on how fast the picture had turned: "it's funny how quickly narratives change."
Last summer, with Trump going after Jerome Powell and the Fed governors, the narratives Hunt tracks on Fed credibility were terrible
They then made what he called an incredible recovery, running all the way through to Kevin Warsh's press conference at the end of July
What has happened since: "the narratives around the Fed losing credibility have just burst and skyrocketed. It's gone just supernova in a way that I really haven't seen in looking at narratives in a long, long time."
He attributed part of it to what the Treasury has been doing under Scott Bessent rather than to the Fed alone
Zeigler described the shape of the earlier move in his own words: "Trump beating up on Powell was just diminishing credibility, kind of taking the stairs down", with the pressure building — and then "the shock was the recovery in Fed credibility once Warsh was coming in", a remarkable climb on the release of that pressure.
Meet the New Boss, Same as the Old Boss
Hunt's account is that Warsh earned the recovery on rhetoric and then spent it in a single press conference.
What he had promised: "He talked a great game about being, I want to be tough on inflation. We're gonna let the market make the decisions. We're kind of getting away from the forward guidance." People liked it
What the July press conference did to that: "It's like an own goal. This is self-inflicted."
The problem was not that rates were left alone. It was what he said about it: "It was meet the new boss same as the old boss." That, Hunt said, is how the narrative shifted going into August
On the Jackson Hole speech being delivered as they record: "It's talk. It's talk talk talk talk. I don't think he's going to raise interest rates. I really don't."
"when that credibility gets broken, it's really hard to get it back"
Gold Is One Divided by Trust
Hunt tied the August move in gold directly to the credibility break. "it's not a coincidence that's when you see gold just taking off here in August", he said, and gave the formulation he uses for the metal: "This big move we've seen in gold because that's how really you think about gold. It's one divided by trust, right?"
Zeigler asked whether other asset classes respond and whether there is an expiration date on any of this. Hunt said no on both counts, and the reasoning runs through the rest of the segment.
The 25 Basis Points He Did Not Do, and the Three He Now Needs
The counter-argument Hunt keeps hearing is that a quarter-point move would not have changed anything in the economy. He said that is not the question.
"I liken it to credibility is being like a teacup and once you break it I mean you can glue a teacup back together again but it's never the same it's always a broken teacup"
The point of hiking once: "once you hike by 25 basis points you never have to hike again." He said doing it once, when nobody made you, is what proves the point
What that buys: the market concludes the man says what he means, and "that's how you get the market to do your work for you" — after which it never comes up again
The cost of not doing it: "now you're going to have to hike three times, not that one time to regain that believability as an inflation fighter. And you can't do that. He can't do that. Not without just tanking the economy."
So the alternative, on his reading, is more of the same rhetoric
What the Chart Measures Is Loudness and Meaning, Not Sentiment
Zeigler asked him to walk through the graphic and explain narrative density. Hunt described what the chart is actually plotting.
"what the chart is how loud or how quiet compared to normal the horizontal line there is the average level of loudness for this story that the Fed is losing credibility"
It is one of a pair. There is a separate story tracked for the Fed gaining credibility, which is the one they looked at last month
"We had a multi-year peak in the summer of 25", when Trump was going after the Fed daily and the coverage was full of stories about him taking it over
From that summer the story declined steadily. It never got quieter than average, but it stopped growing — until the Warsh press conference
Why the shape is unusual: "It's rare to find these bursts, these events where narrative explodes like it did, but that's exactly what we saw."
"We saw hundreds of articles of story, independent stories coming out in financial news after that press conference." All with the same basic gist
The methodology, in his own words: "We're not looking at word counts or sentiment scores or that. We're looking at meaning at the semantics of something.""Different words all to say the same thing. He's just like all the rest. Talk big and actually do nothing about inflation."
Bessent's Buybacks and the Yen Plan Belong to the Same Story
Hunt said the acceleration through August came from the Treasury as much as the Fed, and that the market reads the two together.
He cited Bessent saying "we're going to buy back the long end of bonds of the rates curve. We're going to intervene by selling euros to buy yen"
How that lands in the narrative data: "All this financial manipulation to try to hold down interest rates, not let the market decide, but instead to jawbone these policies."
"it's all in a piece. Meet the new boss, same as the old boss. That's what you're seeing here."
Four Problems, and All of Them Now Have to Be Handled With Damaged Credibility
Asked where this goes, Hunt listed the four things he says the US government, and particularly the Fed and the Treasury, have to deal with.
Iran. "You've got an Iran war which has no easy exit and leads to higher for longer on oil prices and so inflationary pressures."
The stimulus wearing off. "the financial stimulus from the One Big Beautiful Bill that's wearing out" is clearly fading now, and the tariff rebate that helped corporates last quarter is going away while tariffs ramp back up, so pressure returns on the consumer sideHe added the midterms to this one, and made it about mood rather than politics: "Everyone's going to feel bad about the midterms. You just are.""It's going to be negative campaigning and I don't care which side of the aisle you're on or who you're voting for, we're all going to feel bad" — Zeigler added, "And a little bit gross and a little bit frustrated."
Insurance. "systemic issues in the insurance sector", which he identified as "this is the Mark Walter and the Guggenheim insurance policies and the like". Losses cannot be allowed to be assigned in what he called, if not fraud, at least something he has been talking about for a while: "the use of captive insurers to fund a lot of private a lot of the private investment world"
Rates at the far end of the curve, which he called the biggest. "You've got real pressure on the long end of the curve, the 10-year, 30-year interest rates. You can't let that blow out."
What links them: "All of these things can spark another great financial crisis." And "now they're dealing it with damaged credibility. So it's just hard."
There Is No Expiration Date on the Jawboning
Hunt's answer to the question that started the section was flat. "I think that this effort to do I'll call it jawboning financial repression. That's technical term. I don't see any end to it. I just see an acceleration to it."
Zeigler closed by asking where listeners should go for the tools, and Hunt pointed them at Panoptica, where he said a lot of the work is done in public.
Hunt's bottom line is that Warsh gave away the one thing that would have made the rest of his job manageable — the market's belief that he does what he says — and that the price of getting it back is now higher than he will be willing to pay.
Products, Companies & Tools Mentioned
Epsilon Theory (Hunt's shop, and the source of the narrative-tracking work the whole segment is built on)
Panoptica (Where he says a lot of the narrative work is published in public)
Gold (The asset he says is directly priced off the credibility break — one divided by trust, and taking off through August)
The Federal Reserve (Subject of the two narratives tracked, one for gaining credibility and one for losing it)
The US Treasury under Scott Bessent (Buying back longer-dated bonds and planning to sell euros for yen, which Hunt says the market reads as the same jawboning)
Guggenheim (Named with Mark Walter as the insurance-sector problem: captive insurers used to fund the private investment world)
The One Big Beautiful Bill (The fiscal stimulus he says is now clearly wearing off, alongside the tariff rebate for corporates)
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