Aahan Menon, founder of Prometheus Research, joins Jack Forehand to explain what systematic macro data says about economic growth, inflation, Federal Reserve policy, oil prices, AI investment and the outlook for stocks and bonds. They examine why nominal GDP remains stable, why traditional recession indicators have failed, how consumer dissaving is boosting corporate profits, and why today's unusually balanced regime probabilities make this a difficult time for large macro bets.
Why geopolitical volatility and disrupted market trends make concentrated macro bets unusually difficult
What Prometheus Research's daily GDP nowcast says about stable nominal growth
Why AI capital spending matters but consumer spending still drives the US economy
How household dissaving and the wealth effect are supporting corporate profits
Why the economy and Federal Reserve policy may be increasingly sensitive to stock prices
How oil prices are driving inflation volatility and changing expectations for interest rates
Why demand-driven inflation is more persistent than supply-driven inflation
How technology investment has weakened traditional recession and business-cycle indicators
The value and limitations of timing Federal Reserve policy with systematic macro data
What macro regime probabilities, valuations and expected returns suggest for stocks, bonds and diversification
Timestamps
00:02 Why this is a difficult time for big macro bets 05:02 A daily GDP nowcast shows stable nominal growth 09:21 Consumer dissaving and the future economic risk 13:23 The wealth effect linking stocks, spending and profits 17:52 Oil prices and extreme inflation volatility 22:23 Separating persistent demand inflation from supply shocks 27:27 Why traditional recession indicators stopped working 32:55 How technology is changing the business cycle 37:42 Why timing Federal Reserve cycles matters for bond returns 42:28 The limitations of alternative data and short histories 47:33 Macro regime forecasts and expected returns 51:54 Why the macro backdrop still supports equities 56:19 Why investors can finally get paid to diversify
Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.
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