Alf

The odds of a Fed intervention to calm down the bond markets have increased substantially. These policies would be akin to Yield Curve Control (YCC), something not seen in the US since the 1940s. Thread. 1/

Hoping to bring back the old FinTwit vibes, I’d like to propose a challenge: Macro FinTwit Best Trade Idea. Here are the rules of this simple game. Once every 3 months I will tweet and ask everyone who wants to participate (including me) to reply with her best macro trade idea.…

The S&P 500 is down 4% this year when measured in EUR.

US curve steepeners are very popular, but you pay to own them (negative carry and roll) and Bessent can hit you with QRA changes, buybacks and more. I would say there are better “fiscal dominance” expressions out there?

Everyone obsesses about US fiscal, but the pivot from austere budgets to fiscal spending in Europe and Asia is equally important. Fiscal deficits are a global phenomenon now, and that’s the real news.

Over the last 3 years, the S&P 500 has underperformed Gold by 13%. That's including dividends for SPX and the opportunity cost (e.g. negative carry) of holding Gold instead of T-Bills.

''The USD has stopped going down'' crowd often forgets that other fiat currencies are just one release valve for this trade Precious metals, long-end yields and crypto are also key release valves for ''debase-and-run-it-hot'' policies This macro theme rermains intact for now

There is way too much complacency about next week. Remember we are talking about Trump here.

Bessent just asked the Senate to eliminate Section 899 from the bill. So we get BACO on top of TACO now? :)

This is one of the best setups for emerging markets I can think of. And a decade of underperformance means almost everyone is underallocated to EM.

US consumer spending is running at a pace barely half (!) its pre-pandemic trend. This crude oil rally is not going to make things better.

Macro investing is a never-ending learning journey. It’s all about relationships with great people that are willing to share. Be nice, be humble, share and listen carefully.

Picture this. The US is a big oil producer and the issuer of the global reserve currency. Military escalation in Middle East. And yet, the US Dollar can’t rally…

The new podcast with @MacroAlf is up and running. Wondering if the Fed turns dovish at next week's FOMC meeting. spectramarkets.com/library/podcas…

The last 3 core CPI prints averaged 0.14% MoM. That’s lower than in several pre-pandemic periods. The labor market is far from tight. Watch out for Fed speakers…

The new Fed chair Bessent is going to bring rates down. They will be low. So low. It will be beautiful. Thanks for your attention to this matter.

China’s production costs are going down, and they are exporting more cheap stuff in Europe. Couple that with a strong EUR, declining wage growth, and low oil prices. Inflation could well be trending at 1% soon in Europe.

Bessent criticized Yellen for skewing issuance to the short-end, and he's now doing the same Bessent said 3-3-3 (3% growth, 3% deficit, 3 million barrels) and will deliver 1.5-7-0 The same Bessent now could be Fed chair and tell you the inflation target is 2%, and deliver 4%..

Deficits + tariffs = print new $ + devalue $ via higher prices. Add to that Powell & Co inclined to cut rates at the next possible window. Sell $, Buy assets?

Recently markets gave a free pass to 7%+ US deficits under the assumption global capital flows were going to flood US markets anyway. I wonder what happens when the next ''big and beautiful tax bill'' will produce the same (if not worse) US deficits...

The yield curve is rapidly flattening, and it makes sense. The very popular yield curve steepener in 2s10s predicated on the ''Trump premium'' has an awful negative carry and roll. Merely to break-even on the trade in 3 months, you need the curve to steepen 12-13 bps. Ouch!