March 21, 2023

Michael Ashton of Enduring Investments - Inflation and Economics From a Trader's Seat

56 minutes

Inflation is a term that has been on everyone's lips recently. For investors and policymakers alike, staying on top of the latest trends in the inflation market is essential for making informed decisions about their investments and financial strategies.

In this episode, Rusty and Robyn talk with Michael Ashton, a.k.a. The Inflation Guy. Michael, Managing Principal at Enduring Investments, is one of the pioneers in U.S. inflation market innovation. Since 2003, Michael has played a role in developing the U.S. inflation derivatives markets and is a subject matter expert on inflation products and inflation trading. Before founding Enduring Investments, Michael worked in research, sales, and trading for several large investment banks, including Bankers Trust, Barclays Capital, and J.P. Morgan.

Michael talks with Rusty and Robyn about inflation and economics from a trader's seat. He speaks about his inflation outlook, how people should think and respond to inflation, and what makes a good trader.

Key Takeaways

[03:32] - An overview of Michael's professional history.

[05:36] - What Michael says about the current inflation environment.

[06:43] - Michael's outlook for inflation for the rest of the year.

[10:49] - How people should think about inflation.

[11:28] - What Michael has to say about the Fed's efforts to combat inflation.

[13:44] - Why the markets are more optimistic about inflation dropping right now.

[16:08] - Michael's outlook on interest rates, stocks, and real assets.

[19:38] - What the government debt levels mean for the economy and the markets.

[24:39] - How investors should manage their portfolios in an inflationary environment.

[28:57] - How investors and advisors should think about high-frequency economic data.

[31:05] - Michael's approach to using consensus expectations and surveys.

[35:53] - What Michael meant when he said boredom is winning.

[37:51] - How AI is going to change investing.

[41:56] - What Michael advises people about consuming content.

[45:05] - Michael's favorite investment idea.

[47:06] - How Michael maintains his energy to perform at his best.

Quotes

[06:17] - "The inflation derivatives markets are pricing in that inflation would reach two and a quarter by June, and that's just not going to happen. Core inflation and median inflation will take a long time to get back to any semblance of what we thought and what used to be normal. And when I say a long time, I mean years." ~ Michael Ashton

[10:50] - "The debate coming into this year wasn't whether inflation would decline as much as the market thought. The question was, when does everyone realize that inflation won't be 2% by the middle of the year?" ~ Michael Ashton

[24:55] - "One of the things that happen when you get to higher inflation, in addition to having more volatile inflation, is all of the financial variables get more volatile. You need to diversify more than you otherwise would have in real assets, particularly commodities." ~ Michael Ashton

Links

Michael Ashton on LinkedIn

Michael Ashton on Twitter

Enduring Investments

Cents and Sensibility: The Inflation Guy Podcast

Lampshades on Fire by Modest Mouse

J.P. Morgan

Barclays Corporate and Investment Bank

Deutsche Bank

John Huston

Trinity University

The Magnus Archives

Inflation Guy

Connect with our hosts

Rusty Vanneman

Robyn Murray

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By Orion Portfolio Solutions

4.6

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