Given the nature of this platform, it is hard to know what kind of track record folks have in making major macro calls. Here's a look at my track record over the last few years. Thread.

While you don't want to read too much into any couple days, it is notable that despite the negative market reaction in the last couple days, there has been essentially no change in the admin tone. If anything commentary looks defiant to the stock market moves.

With sharp fiscal tightening ahead, typically the Fed would be signaling efforts to respond with easing. But for now, the Fed seems happy with policy. As JP said on Friday: "The costs of being cautious are very low. The economy is fine. It doesn't need us to do anything really."

This suggests a pretty tough combination of policy ahead. The new admin continues full steam ahead on tightening policies further with little regard to the possible impacts on the equity markets. And the Fed appears content to sit on its hands until growth weakness is obvious.

In the last 5 years investors have become increasingly accustomed to markets pricing in increasingly positive growth outcomes, with stocks outperforming risk-matched bonds massively since '20. While the recent moves feel big up close, this diff is only back to Oct '24 levels.

While initial moves have taken out euphoria priced in to kick off the year, current levels are far from pricing an admin comfortable with sharp fiscal tightening and a delayed Fed response. Pricing in this "Wrecking Ball" reality requires a much more significant decline ahead.

Professional investors are cutting back on risk taking right at the time when many other investors are already overweight equity exposure and finding increasingly challenging to BTFD. youtu.be/1zM7QGyO2K4?si…

Are equity returns now part of the culture wars?

There are signs that inflation is starting to perk up again as the new admin policies are digested thru the economy. Businesses are indicating a desire to raise prices and consumers expect higher inflation ahead even as backward looking measured inflation moderates. Thread.

The broad based rise in inflation expectations poses a challenge for the Fed to cut quickly absent a crisis. Already 3 cuts are priced in for the rest of the year despite JP saying "The economy is fine. It doesn't need us to do anything really." x.com/BobEUnlimited/…

Markets are far from reflecting the significant fiscal tightening ahead even with the recent selloff. youtu.be/eue_vjwMgXE?si…

Anemic response today to what initially appeared to be a big downside inflation surprise, reflecting the Fed isn’t bailing out this market any time soon.

One of the bull cases with the new admin was that their pro-biz stance would ignite a wave CEO confidence leading to much greater activity and investment. While a surge in confidence came initially, there are increasing signs of a sharp reversal in recent weeks. Thread.

Typically such an extreme downshift in confidence has aligned with sharp weakness in economic and financial conditions. So far the financial reaction has been muted. h/t Jono Bayes

With the post-election euphoria about the new admin reversed in recent weeks, the big question is whether extreme policy uncertainty drives retrenchment instead. For an equity market just off highs, a broad corporate pullback ahead would spell trouble and is hardly priced in.

Our "Curb Your Enthusiasm" outlook to kick off the year has largely played out as expected. youtu.be/CljGRRn_m2w?si…

While headline CPI & PPI looked soft, the data that flows into the PCE (which is what the Fed cares above) shows little indication of inflation relief ahead. h/t RenMac: Renaissance Macro Research which typically has a pretty good monthly estimate.

This is your irregular reminder that you don't hold enough gold in your portfolio.

While gold often looks like a risky asset in the day-to-day, there are important structural dynamics globally supporting medium term price appreciation. youtu.be/nF_mCRbDKVA?si…

Oil prices have fallen a lot, but gasoline prices have not.