Great informative post, but wouldn’t it be a better framework if you would list all scenarios that could occur in the sections you mentioned? You wrote that you expect lower real rates driven by sticky inflation and an accommodative Fed. Why do you expect sticky inflation, based on what data? It’s just one outcome. It could literally do 10 different things.
would love a scenario analysis on that!
Is your "Regime mapper" indicator public? looks interesting
Thank you! If I tried to list every possible scenario (there could easily be 50+), the report would turn into a 500 page book. I mentioned that the sticky inflation would be from exceptionally strong growth. You’re absolutely right that outcomes could diverge in many directions, but for the sake of an outlook, I focused on the scenario I believe has the highest probability. Unfortunately, my regime mapper indicator isn’t public
If you take a look at the growth heatmap in the report you’ll see that nominal GDP, GDPNOW and other growth metrics are exerting positive speed on a 7 and 3 month basis
Yep, nailed it. Liquidity can keep things floating but without small caps or real breadth it’s hard to call it genuine growth optimism. Credit spreads tell you where people feel safe not where they’re actually willing to take risk
Great informative post, but wouldn’t it be a better framework if you would list all scenarios that could occur in the sections you mentioned? You wrote that you expect lower real rates driven by sticky inflation and an accommodative Fed. Why do you expect sticky inflation, based on what data? It’s just one outcome. It could literally do 10 different things.
would love a scenario analysis on that!
Is your "Regime mapper" indicator public? looks interesting
Thank you! If I tried to list every possible scenario (there could easily be 50+), the report would turn into a 500 page book. I mentioned that the sticky inflation would be from exceptionally strong growth. You’re absolutely right that outcomes could diverge in many directions, but for the sake of an outlook, I focused on the scenario I believe has the highest probability. Unfortunately, my regime mapper indicator isn’t public
100%, but based on what do you expect continues strong growth?w
If you take a look at the growth heatmap in the report you’ll see that nominal GDP, GDPNOW and other growth metrics are exerting positive speed on a 7 and 3 month basis
missed that one :)
Yep, nailed it. Liquidity can keep things floating but without small caps or real breadth it’s hard to call it genuine growth optimism. Credit spreads tell you where people feel safe not where they’re actually willing to take risk