Bob Elliott, cofounder and CEO of Unlimited, which uses machine learning to create index replication ETFs of 2&20 style alternative investments like hedge funds, venture capital, and private equity, joins Julia La Roche on episode 170.

In this episode, Elliott discusses the macro picture and highlights that the economy is in an income-driven expansion, where people are spending out of their income, leading to sustainable growth. However, this income dominance is creating challenges for the Federal Reserve, as inflation remains elevated and nominal growth is strong. Elliott believes that the Fed will continue to collect more information before making any significant policy changes. 

He points out that assets are in an “air pocket” right now, and that the biggest risk for equity investors is the economy remains too strong, creating pressure on the bond market. He suggests that investors should consider holding more cash, allocate a portion to gold and commodities, and be cautious about stocks and bonds.

Links:

Twitter: https://twitter.com/BobEUnlimited

YouTube: https://www.youtube.com/@BobEUnlimited

Website: https://www.unlimitedfunds.com/

Timestamps:

00:00 Introduction and welcome Bob Elliott 

01:15 Macro picture today + income-driven economic expansion 

03:34 Different angles of looking at inflation 

06:11 Fed's policy outlook

09:15 Implications of higher for longer 

11:50 Long-end of the bond market is the critical driver of asset prices

14:47 The biggest risk for equity investors is the economy remains too strong that creates pressure on the bond market

16:00 Allocating in this setup 

18:30 We’re in an 'air pocket’ right now 

23:19 The Fed

25:50 Gold allocation and commodities 

30:10 Parting thoughts 

32:46 Confusion of the income-driven expansion

36:00 Recession