The laws of macro investing are being re-written, and investors who fail to adapt to the rapidly changing monetary environment will struggle to keep pace. Felix Jauvin interviews the brightest minds in finance about which asset classes they think will thrive in the financial future that they envision. Follow Felix: https://twitter.com/fejau_inc Follow Forward Guidance: https://twitter.com/ForwardGuidance Subscribe on YouTube: https://www.youtube.com/@ForwardGuidanceBW Follow Blockworks: https://twitter.com/Blockworks_ Forward Guidance Newsletter: https://blockworks.co/newsletter/forwardguidance Forward Guidance Telegram: https://t.me/+nSVVTQITWSdiYTIx
US Treasury yields are rising primarily due to market expectations of a higher terminal Fed rate, fueled by robust nominal GDP growth rather than inflation or fiscal concerns. The US economy currently exhibits a narrow, consumption-driven growth model heavily reliant on hyperscaler AI capital expenditure, which contras...
The bond market is currently undergoing a violent repricing, with yields on the 10-year and 30-year rising as investors grapple with unsustainable fiscal deficits and persistent inflationary pressures. Veteran fixed-income trader DCP highlights that the market lacks a clear catalyst for a reversal, as AI-driven capital...
The global macroeconomic outlook is defined by a persistent stagflationary malaise, where central banks are forced into restrictive hiking cycles despite signs of slowing growth. Recent Federal Reserve policy, characterized by a unanimous vote to hike, reflects a reactive stance to sticky inflation and a waning fiscal ...
Historically low realized correlation among S&P 500 stocks has suppressed market volatility, creating a fragile environment where traditional risk-off hedges are failing. Dean Curnutt, CEO of Macro Risk Advisors, argues that this low-correlation regime is partly an endogenous result of complex quantitative investment s...
Market participants are navigating a high-stakes environment as the bond market tests the efficacy of central bank interventions and the Federal Reserve weighs a potential rate hike. The Bank of Japan’s recent bond buyback efforts appear insufficient to suppress long-end yields, reflecting a broader struggle between po...
The US dollar has lost over 90% of its value since the departure from the gold standard, driving a fundamental shift in portfolio construction toward "debasement assets." Investors are increasingly moving away from traditional 60/40 portfolios, which rely entirely on fiat-denominated assets, to incorporate gold and Bit...
The current macroeconomic environment centers on the tension between fiscal policy and market stability, as Treasury Secretary Bessent’s bond buybacks face criticism for suppressing yields and delaying necessary fiscal discipline. This interventionist approach, coupled with persistent deficit spending, reinforces the "...
The U.S. Treasury’s decision to double the size of liquidity support buybacks for long-dated nominal coupon securities signals a definitive shift toward fiscal dominance and aggressive currency debasement. By funding these buybacks through Treasury bills, the Treasury is effectively executing a form of "fiscal Operatio...
The current macroeconomic regime, defined as "Paradigm C," involves running the economy hot to manage high debt-to-GDP levels, resulting in equity market bubbles and significant bond market volatility. As the neutral rate (R-star) rises above the effective Fed funds rate, capital becomes increasingly scarce, challengin...
Fiscal dominance and state-directed economic growth define the current market regime, as the Federal Reserve and Treasury coordinate to stifle volatility and protect long-term capital expenditure. This interventionist strategy, exemplified by the FIMA facility and yen support, aims to de-lever the economy by maintainin...
The "Awesome Portfolio" strategy, consisting of a 20% allocation each to stocks, bonds, gold, cash, and real estate, provides superior risk-adjusted returns by significantly reducing volatility and drawdowns compared to traditional 60/40 models. Jared Dillian, editor of the Daily Dirt Nap, argues that this approach pri...
The recent market turbulence stems from the aggressive unwinding of the AI trade, exemplified by the forced liquidation of Leopold Ashbrenner’s fund, which exposed the systemic reliance on leverage within the technology sector. Federal Reserve official Kevin Warsh’s recent communication signaled a strategic shift, prio...
The AI compute market is shifting from an era of "token maxing" toward a focus on token efficiency and strategic model orchestration. As enterprises seek sustainable returns on investment, they are increasingly routing tasks between expensive frontier models and cost-effective, open-weight alternatives. This transition...
The market is experiencing a historic momentum unwind, with the AI trade facing significant pressure as capital rotates into value and smaller-cap sectors. This shift is exacerbated by structural market issues, including the proliferation of leveraged ETFs and the outsized influence of market makers, which amplify vola...
Successful trading requires divergent, independent thinking to avoid the performance traps of the crowd. Brent Donnelly, president of Spectra Markets, emphasizes that traders must move beyond traditional fundamental and technical analysis by integrating insights from poker and behavioral psychology to manage risk and c...
Current market instability stems from a significant momentum factor implosion and the unwinding of highly correlated, AI-driven tech trades. This correction follows a pattern of reflexive, liquidity-fueled growth reaching a breaking point, exacerbated by yen carry trade volatility and cooling labor market data. Wage gr...
The "Fed put"—the long-standing market assumption that the Federal Reserve will intervene to support risk assets during sell-offs—is effectively dead under new leadership. This regime shift demands a defensive investment posture, as the removal of predictable central bank backstops increases market volatility and reduc...
The current economic landscape reflects a transition past peak inflation and peak growth, as bond markets signal a shift away from aggressive rate-hike expectations. Monetary policy tools appear increasingly ineffective for managing modern, industrial-heavy investment booms, such as the AI-driven infrastructure expansi...
The Federal Reserve’s pivot under Kevin Warsh signals a departure from long-standing "Forward Guidance" toward a more opaque, less communicative policy framework. This shift coincides with a market grappling with peak hawkishness despite cooling inflation and significantly lower oil prices. Capital is increasingly flow...
Kevin Warsh’s inaugural FOMC meeting signals a hawkish shift in Federal Reserve policy, characterized by a deliberate reduction in forward guidance and a more concise communication style. By establishing task forces to address balance sheet structure, data modernization, and inflation frameworks, the new chair aims to ...
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