My time in finance has led me to believe that traders and investors are far more prone to groupthink than they’re willing to admit to. “Hedge fund manager predicted inflation after QE and was wrong” is very low on my list of things that surprise me.
They are still the number one domain experts insofar as Central Bank policy goes, as that's one of their primary preoccupations. Perhaps aside from economists that actually work at the Fed.
Fundamentally, trading an instrument doesn’t necessarily make you an expert in all aspects of it, only in those aspects related to making a buck on it. Exactly how much a trader ends up knowing seems to vary. While a bond trader might understand how bonds work very well, chances are that a grain trader would make a pretty bad farmer.
It seems in passing that fixed income traders have a moderate level of expertise on how government debt works, with their long, loud, and so far wrong predictions about catastrophic inflation undermining any claim they have towards total expertise.
Yes there's some fixed income trades (in the short term quant space) that don't require such expertise, that's Taleb's Green Lumber problem, but that doesn't apply to PIMCO. Especially if we're talking about the lead at PIMCO. It's harder to get that job than it is to be a staff economist even at the Fed, so I would put him as close to number one in terms of expertise in understanding and especially predicting monetary policy.
(1) I've published papers with academic economists. I have to say, they really don't know the practical details of central bank policymaking, and nor do they have to in order to publish more papers. That's not their job.
The Robinhood impact on the US market makes me incredibly nervous, as it should others. That Cathie Wood can mention CRISPR in a YouTube video and gene therapy stocks rocket that same afternoon should be a fairly sizeable red flag I would have thought.