Mind the Macro

In this episode, recorded on Friday, January 16, we examine the inflation outlook and the growing influence of geopolitics on financial markets. A superficially benign headline CPI reading obscures a firmer underlying inflationary trend that is likely to assert itself later in the year. Other inflation gauges are already running hotter, raising questions about whether the CPI is understating price pressures. We also consider the economic drag from the resumption of student loan payments, the withdrawal of health care subsidies, the inflationary impulse from tariffs, and recent developments in Venezuela. Taken together, these forces point to a more challenging backdrop for equity markets in the months ahead.

This week, we examine a run of key labor market releases alongside the latest GDP and productivity data. The Employment Situation report showed nonfarm payroll growth coming in below expectations, capping off the weakest year for job creation since 2020 and the weakest non-recessionary year since 2003. While much of the commentary celebrated the headline GDP figure, we were left with more questions than answers. Net exports is typically a modest swing factor but it accounted for more than a third of real GDP growth. Most of the remaining contribution came from personal consumption expenditures, yet that growth was narrowly concentrated in just four subsectors, several of which appear to have been estimated in ways that depart from historical practice. In our view, the jury is still out on the underlying strength of demand. Productivity also surprised to the upside, but here too caution is warranted. Given productivity’s reliance on GDP in its calculation, any uncertainty around output necessarily casts doubt on the apparent strength of the productivity gains.

In this episode, recorded on December 19, 2025, we examine the latest retail sales, employment, and CPI reports. Retail sales were flat on the month, underscoring a continued pullback in consumer spending as sentiment deteriorates and labor-market momentum slows.

The employment report was more troubling than the headline figures suggest. The unemployment rate rose to 4.6% in November, while payrolls fell in October before rebounding modestly in November. A closer inspection, however, reveals a far weaker underlying picture. Year to date, job gains in Health Care and Social Services have exceeded total payroll growth, implying that employment outside those sectors has declined outright. After adjusting for the outsized contribution from health care and the Federal Reserve’s estimated 60,000 monthly overstatement, we estimate that non–Health Care payrolls have fallen by more than 500,000 this year.

We also discuss the latest CPI report, whose construction raises serious questions. Evidence increasingly suggests that the Bureau of Labor Statistics imputed zero inflation for missing observations, including within the Shelter component, which accounts for roughly one-third of the index. If correct, this would render the headline inflation figures deeply misleading. That said, we also explore the counterfactual: what if the data are, in fact, accurate?

We hope you enjoy the episode and thank you for listening.

On this December 12 episode, we turn to the latest JOLTS report and, more importantly, the decisions and tone emerging from the Federal Open Market Committee. Job openings surprised modestly on the upside, yet were largely unchanged from the previous month. The more telling signal came from the quits rate, a gauge the Federal Reserve treats as a window into the confidence of American workers. Quits have fallen to their lowest level since August 2020, when the economy was still in the teeth of the Covid 19 pandemic. The message is clear enough. Workers are reluctant to walk away from their positions because they doubt that opportunities exist elsewhere.

Stagflation has made it increasingly difficult for the central bank to articulate a coherent strategy. Doves on the committee argue that a weakening labor market should outweigh inflationary concerns, particularly if the recent rise in prices proves transitory. Yet, as we note in this episode, monetary policy offers no free lunch. A steepening yield curve may in fact be the harbinger of near term economic strain and an accelerator of recession risk.

On this December 5th episode, we examine a raft of data releases that together sketch a disquieting portrait of the US economy. The latest ADP report showed the economy losing 32,000 private-sector jobs in November, while the Challenger Job Cuts report registered more than 70,000 layoffs—only the third time since 2008 that November cuts have exceeded that threshold. The Beige Book echoed this deterioration, noting that firms have moved beyond hiring freezes and begun outright reductions in headcount, a trend reinforced by the ISM Manufacturing survey.

Markets initially rallied on the release of September’s Personal Consumption Expenditures report, encouraged by strong headline figures. Yet the underlying details told a more troubling story. Real PCE and real disposable personal income were essentially flat on the month, and both the headline and core PCE Price Index appear to be drifting upward. Notably, nondurable goods prices surged on both monthly and annual measures—potentially reflecting tariff-related pressures—raising doubts that these increases will prove temporary.

Taken together, the data continue to form a mosaic consistent with a stagflationary backdrop: weakening activity, softening labor demand, and price pressures that are proving stubborn rather than transitory.

On this November 21st episode, we examine the government’s first employment report since the shutdown. The headline payroll figures were strong, but nearly every detail beneath them was troubling. Most of the job growth came from three sectors that are more vulnerable to economic swings and that offer lower compensation, raising questions about the quality and durability of recent hiring. The unemployment rate also edged up to 4.4 percent, adding yet another data point to the fading labor market.

We then turn to the market’s poor reaction to Nvidia’s blowout earnings release. Although Nvidia continues to benefit from vast investment plans in artificial intelligence, the earnings release revealed that it may be the last to be affected if those plans are scaled back. With firms such as ChatGPT burning through enormous amounts of cash, it is far from certain that investors will remain patient long enough for their more ambitious visions to be realized. The result is a market struggling to price the boundary between promise and excess in a technology boom that may already be nearing its top.

On this November 14 episode we examine a market that is drifting without a single unifying negative narrative yet is steadily accumulating reasons for concern. High yield spreads are widening, and option adjusted spreads on CCC rated debt never returned to their pre Liberation Day lows. Creditors, it seems, have been pricing in greater risk for some time, and the recent rise in spreads only reinforces that view.

We note as well that lending to non bank financial institutions has surged by roughly fifty percent since the start of the year, much of which we suspect has flowed to private credit firms that have expanded rapidly during this cycle. The broader backdrop is no more comforting. OpenAI has requested government assistance, car loan delinquencies have reached a record high, Bitcoin has suffered fresh declines, and the economic uncertainty index remains elevated.

Taken together the picture is not one of outright crisis, but of mounting stresses in corners of the financial system that investors can no longer ignore.

This November 7, 2025 podcast opens with a sober look at a labor market that is showing clear signs of strain, despite the absence of governmental data due to the shutdown. The latest figures from Challenger Gray and Christmas show that announced layoffs now exceed one million so far this year, a threshold that in earlier cycles has been crossed only in recessions. We also assess new releases from Indeed on job openings, along with the latest reading from the ADP payroll report, both of which point to a labor market that is continuing to lose momentum.

Consumer sentiment has slumped to 50.3, near the lowest level ever recorded. The decline was driven by a sharp drop in views of current personal finances and a further fall in expectations for business conditions over the coming year.

And in a notable intervention, John Williams, President of the New York Federal Reserve, signaled that the central bank may need to add liquidity to markets in response to growing tremors in short term funding.

In this episode, we examine an unsettling mix of economic signals: a seemingly benign inflation print, rumblings in the banking system reminiscent of the pre-crisis era, the first major wave of layoffs, and growing dissent at the Federal Reserve. Markets greeted the latest CPI release with enthusiasm. Yet the details tell a darker story. The dubiously calculated shelter component has become a source of disinflation. Stripped of this measure, consumer prices rose faster than expected. At the same time, liquidity strains are re-emerging. On Wednesday, a record number of banks tapped the Fed’s Standing Repo Facility, a sign that funding pressures are tightening despite official reassurance. Meanwhile, a growing list of firms including UPS, Amazon and Target have announced large layoffs, suggesting that the post-pandemic “low-hire, low-fire” equilibrium may be giving way to a harsher “low-hire, high-fire” regime. Finally, disquiet is spreading within the Federal Reserve itself. As policymakers diverge over the timing and scale of future easing, market participants betting on a December cut and several more in 2026 may be disappointed.

In this episode, we take a different tack. We begin with the latest inflation figures, which offer little comfort to policymakers, before turning to the our bear case for the equity markets. From the pandemic-era flood of fiscal and monetary stimulus to the abrupt tightening that followed in 2022, the economic pendulum has swung with unusual violence. Now, as higher rates bite, the data point to a steady loss of momentum: hiring is slowing, corporate profits are softening, and consumers—once flush with savings—are beginning to retrench. The question is not whether the economy is cooling, but how sharply it will do so.