In Macro Voices Episode 482, Erik Townsend interviews Mike Green, Chief Strategist and Portfolio Manager for Simplify Asset Management, about the economic implications of government policies, particularly those of the Trump administration, and the impact of passive investing on market structure. Green argues that passive investing inflates the market, creating inelasticity, where a dollar flowing into the market generates a disproportionate increase in market capitalization. They discuss the effects of tariffs on inflation, the potential deflationary impact of AI on the service sector, and the outlook for equity markets. Green suggests that fixed income markets are currently undervalued and offer a more stable investment option compared to equities, which are susceptible to passive investment distortions. They also touch on monetary policy, high yield investments, and the accuracy of inflation metrics.
