Alf

Alf

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CIO of https://t.co/evoEgFfdrz (Macro Hedge Fund) | Founder of The Macro Compass: Institutional Macro Research

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Hi guys, quick announcement. I won't be posting here anymore until further notice. To everyone who supported my work and engaged fruitfully over the years: thank you. If you want to be in touch, my email is: alf at my research firm dot com And remember: never break pasta.

New TMTF podcast out with my buddy Brent Donnelly. - Maybe the Fed is ready to move dovish, but what's already priced in bond markets? - How to think about carry when setting up trades - Sometimes Brent is more Italian than me Check it out on your preferred podcast platform

Not sure who needs to hear this. But with Fed Funds at 4.33% and terminal rate at 3.1%, long bonds are not offering big juice and carry is quite limited. The curve could still be way steeper as the inflation risk premia goes up.

So the US enacted a $300 billion tax hike for 2025 with pretty much no offsetting new fiscal injection this year. Perhaps investors should include this in their assessment going forward?

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

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