Andy Constan returns to Excess Returns to break down today’s macro environment using his Four-Pillar Framework — growth, inflation, risk premia, and flows. Drawing on lessons from his time at Bridgewater and Brevan Howard, Andy explains how he blends systematic and discretionary approaches to form a clearer picture of markets. He discusses the AI-driven CapEx boom, the economic effects of tariffs, Fed independence under Trump, and why the current setup could produce extreme outcomes in either direction.

Topics covered:

• Systematic vs. discretionary macro investing

• Andy’s Four-Pillar Framework: growth, inflation, risk premia, and flows

• How AI CapEx is driving growth — and what happens when it stops

• Tariffs, policy shifts, and their impact on inflation and growth

• The Fed’s independence and what it means for markets

• Risk premia, volatility, and asset allocation in uncertain environments

• How major flows and corporate buybacks shape market direction

• Why Andy sees a “digital” macro environment with binary outcomes

Timestamps:
00:00 Intro and setup
02:00 Systematic vs. discretionary macro investing
14:00 The Four-Pillar Framework explained
22:00 Growth outlook and AI-driven CapEx boom
33:00 The real impact of tariffs on the economy
39:00 Thinking in probabilities and constructing macro portfolios
40:00 Fed independence and policy alignment
47:00 Labor market dynamics and AI uncertainty
48:30 Risk premia and asset allocation
56:00 Flows, buybacks, and corporate debt
01:00:00 What Andy’s watching next
01:06:00 Why macro outcomes have never been more digital