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Dimitry Nakhla | Babylon Capital®
$AMZN trades <15x NTM OCF — historically a very attractive risk/reward setup
Next two years of OCF Per Share Est:
2026 ➡️ $17.35
2027 ➡️ $21.01
CAGR at various multiples assuming 2027 OCF at $18.91 (-10% vs current estimates)👇🏽
18x | 20.7%
17x | 17.2%
16x | 13.8%
15x | 10.3% https://t.co/Ztz8VIoxO9
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$AMZN trades <15x NTM OCF — historically a very attractive risk/reward setup
Next two years of OCF Per Share Est:
2026 ➡️ $17.35
2027 ➡️ $21.01
CAGR at various multiples assuming 2027 OCF at $18.91 (-10% vs current estimates)👇🏽
18x | 20.7%
17x | 17.2%
16x | 13.8%
15x | 10.3% https://t.co/Ztz8VIoxO9
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Quiver Quantitative
JUST IN: Representative Seth Magaziner has signed Rep. Luna's discharge petition to force a vote on a congressional stock trading ban. https://t.co/1FYzKGbkr0
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JUST IN: Representative Seth Magaziner has signed Rep. Luna's discharge petition to force a vote on a congressional stock trading ban. https://t.co/1FYzKGbkr0
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EndGame Macro
The SOFR Strip Wants A Soft Landing But Reality Isn’t Cooperating
This chart is just the SOFR strip, a run of 3 month futures that tell you where the market thinks short term policy rates are headed. When the lines move higher, the market is pricing more cuts. When they sag, cuts get pulled out of the outlook.
What stands out is how tightly the contracts move together. Even the further out maturities, the ones that should reflect some sense of steady state neutral are still whipping around like they’re tied to the same emotional anchor. That tells you the market doesn’t really believe it knows the new neutral rate. Everything is still trading off one question…can the Fed actually cut without stirring inflation back up?
The Quiet Message Inside the Noise
If you look at where the strip settles, it’s not calling for some dramatic return to zero rates. The implied levels sit in the low 3s, a world where inflation never truly goes back to the pre COVID regime, but growth slows just enough for the Fed to ease. It’s the middle path outcome everyone claims to want, but it’s also the most fragile one.
And that’s the part the chart gives away. These contracts are priced for a very orderly transition where inflation drifts down, growth softens but doesn’t break, and the Fed trims rates without losing credibility. There’s no space in these prices for a messy outcome on either side, not a stubborn inflation backdrop, and not a credit accident.
My Read
To me, the setup feels asymmetric. If inflation sticks or wages won’t cool, these futures are too high. If the credit stories we’ve been tracking with consumer strain, CRE refinancing, the 2026 debt wall spill into employment, then the strip can jump higher in a hurry because it’s only priced for gentle easing, not a real downturn.
So the chart ends up being less about the exact levels and more about the mood of the market. It’s a curve trying to believe in a soft landing, even though the world underneath it hasn’t earned one yet.
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The SOFR Strip Wants A Soft Landing But Reality Isn’t Cooperating
This chart is just the SOFR strip, a run of 3 month futures that tell you where the market thinks short term policy rates are headed. When the lines move higher, the market is pricing more cuts. When they sag, cuts get pulled out of the outlook.
What stands out is how tightly the contracts move together. Even the further out maturities, the ones that should reflect some sense of steady state neutral are still whipping around like they’re tied to the same emotional anchor. That tells you the market doesn’t really believe it knows the new neutral rate. Everything is still trading off one question…can the Fed actually cut without stirring inflation back up?
The Quiet Message Inside the Noise
If you look at where the strip settles, it’s not calling for some dramatic return to zero rates. The implied levels sit in the low 3s, a world where inflation never truly goes back to the pre COVID regime, but growth slows just enough for the Fed to ease. It’s the middle path outcome everyone claims to want, but it’s also the most fragile one.
And that’s the part the chart gives away. These contracts are priced for a very orderly transition where inflation drifts down, growth softens but doesn’t break, and the Fed trims rates without losing credibility. There’s no space in these prices for a messy outcome on either side, not a stubborn inflation backdrop, and not a credit accident.
My Read
To me, the setup feels asymmetric. If inflation sticks or wages won’t cool, these futures are too high. If the credit stories we’ve been tracking with consumer strain, CRE refinancing, the 2026 debt wall spill into employment, then the strip can jump higher in a hurry because it’s only priced for gentle easing, not a real downturn.
So the chart ends up being less about the exact levels and more about the mood of the market. It’s a curve trying to believe in a soft landing, even though the world underneath it hasn’t earned one yet.
It is amazing how much SOFR futures are pricing out cuts in a 2% inflation floor regime. Y'all have read Steve Miran's SEP, know that Kevin Hassett is still leading candidate for the chair and Lisa Cook's case is before SCOTUS soon? https://t.co/HHkrvic5c4 tweet
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Quiver Quantitative
JUST IN: Representative Ro Khanna has signed Rep. Luna's discharge petition to force a vote on a congressional stock trading ban. https://t.co/UijSN6w6po
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JUST IN: Representative Ro Khanna has signed Rep. Luna's discharge petition to force a vote on a congressional stock trading ban. https://t.co/UijSN6w6po
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Quiver Quantitative
JUST IN: A brand new account on Polymarket just bet $40K that the Fed won't lower interest rates later today.
They will win $1.6M if they are correct. https://t.co/ywAytWNzKI
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JUST IN: A brand new account on Polymarket just bet $40K that the Fed won't lower interest rates later today.
They will win $1.6M if they are correct. https://t.co/ywAytWNzKI
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Quiver Quantitative
JUST IN: Representative Haley Stevens has introduced Articles of Impeachment against Secretary RFK Jr. https://t.co/wssWFCKCx9
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JUST IN: Representative Haley Stevens has introduced Articles of Impeachment against Secretary RFK Jr. https://t.co/wssWFCKCx9
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EndGame Macro
25 Keeps the Narrative Intact And 50 Breaks It Wide Open
My base case is still a 25 bp cut today. Not because everything is fine, but because the Fed knows how much the size of a move shapes the story. A quarter point cut says, “We’re easing because the cycle is slowing, and we’re doing it on our terms.” It keeps the tone calm and intentional which is exactly what they want heading into a fragile part of the year.
A 50 bp cut lands completely differently. Anytime the Fed has gone that big like in 2001, late 2007 and after major shocks in the late ’80s and early ’90s the market’s reaction has followed the same arc. At first, there’s relief with cheaper money, quicker easing, a little bounce in risk. But that doesn’t last, because people immediately start asking why the Fed felt the need to move that aggressively. And once that question hangs in the air, the psychology shifts. Big cuts rarely read as confidence; they read as concern. They tell the market that something underneath is weakening faster than we thought.
That’s why I don’t think Powell touches 50 today. A move that size would overpower whatever message he tries to deliver at the podium. Instead of steady, planned easing, the headline becomes “why did they panic?” And once markets start trading that narrative, you can’t reel it back in with a press conference.
So 25 isn’t just a policy choice, it’s the cleanest way for them to preserve the illusion of control.
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25 Keeps the Narrative Intact And 50 Breaks It Wide Open
My base case is still a 25 bp cut today. Not because everything is fine, but because the Fed knows how much the size of a move shapes the story. A quarter point cut says, “We’re easing because the cycle is slowing, and we’re doing it on our terms.” It keeps the tone calm and intentional which is exactly what they want heading into a fragile part of the year.
A 50 bp cut lands completely differently. Anytime the Fed has gone that big like in 2001, late 2007 and after major shocks in the late ’80s and early ’90s the market’s reaction has followed the same arc. At first, there’s relief with cheaper money, quicker easing, a little bounce in risk. But that doesn’t last, because people immediately start asking why the Fed felt the need to move that aggressively. And once that question hangs in the air, the psychology shifts. Big cuts rarely read as confidence; they read as concern. They tell the market that something underneath is weakening faster than we thought.
That’s why I don’t think Powell touches 50 today. A move that size would overpower whatever message he tries to deliver at the podium. Instead of steady, planned easing, the headline becomes “why did they panic?” And once markets start trading that narrative, you can’t reel it back in with a press conference.
So 25 isn’t just a policy choice, it’s the cleanest way for them to preserve the illusion of control.
WATCH LIVE TODAY: Press conference with #FOMC Chair Powell at 2:30 p.m. ET: https://t.co/1uJrua5Yif
https://t.co/FJa6TblbC1 https://t.co/4KvqVjHSM1 tweet