Fat tails, crowded positioning, consensus inversions.
Market mispricing Fed easing — Warsh more dovish than market pricing
REER at 92.72 is 5.6% undervalued — mean reversion alone justifies 3-4% appreciation
Short-INR trade is most crowded in EM FX — marginal sellers exhausted
Warsh cuts Fed funds to 2.5% or lower by end-2027, DXY collapses below 92.
Warsh cuts to 2.5% extrapolates signaling into policy, ignoring FOMC is a 19-person committee.
Core PCE stays above 2.7% through Q3 2026.