Super-Macro Management

SuperMacro provides a summary of the most critical economic and financial news from the major regions, with insights into the impact on markets and policy. We take a detailed look at the fundamentals once a week, highlighting opportunities for tactical trading strategies and longer-term investments.

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#20
Today · 17 min
The Fed's About to Outpace Everyone
The Fed hiked 25 basis points last week, and the market's answer was to rally. The S&P is up 3.5% since the meeting, the Nasdaq 4.5%. Retail sales control group spending jumped 1.4% in August against a forecast for half a percent. Whatever that hike was meant to do, it isn't slowing anything down yet. That isn't the story everywhere else. The BOJ's own hawks are on their way out. Two doves have already been appointed and the two remaining hawks will end up being replaced by more doves. The Bank
#19
September 15 · 45 min
Buybacks Fail to Slow Bond Bloodbath | ft. Andy Constan of Damped Spring Advisors
Oil is up roughly 12% over the past week, hitting a US economy already at full capacity, 4.1% unemployment and payrolls averaging 106,000 a month. That's the kind of shock that turns into services and core inflation rather than fading on its own. Fed funds futures already price an 87% chance of a hike this week. The real question is what happens to the other 75 basis points still priced in after that. The other supposed backstop already cracked. Bessent had promised to at least double the Treasury's bond buybacks, with the street expecting 5 to 7.5 billion. The first operation only spent 3.6 billion against 10.5 billion of bonds dealers offered, because Bessent wouldn't pay up for the rest. The 30 year yield broke through 5% anyway, and the 10 year touched a level it hasn't held since 2007. Jonny sits down with Andy Constan, founder and chief investment officer of Damped Spring Advisors and his former boss at Salomon Brothers, to unpack why the sell-off has further to run, why Treasury's own supply games matter more than talk of QE, and why he thinks the real fault line is the private credit funding the AI buildout, not the bond market. In this episode: Oil up around 12% last week, landing on an economy at 4.1% unemployment and 106,000 average monthly job growth Treasury's buyback boost landing at 3.6 billion spent against 10.5 billion of bonds on offer The 30 year yield through 5% for the first time in years, the 10 year testing a level not held since 2007 An 87% priced chance of a hike this week, and what happens to the other 75 basis points priced in after that Term premium on the 10 year at 90 basis points, up from minus 50 in the 2020 bubble Why long dated TIPS look like the better trade than nominal Treasuries right now Every major bond deal funding the AI buildout, an 80 billion Google raise included, still trading underwater Jonny has spent 25 years trading macro at the highest institutional level. This is not retail speculation or headline chasing. It is rigorous, independent analysis from someone who has sat at the table. New to SuperMacro? Get 30 days of our Daily Note entirely free at www.super-macro.com 0:00 Intro: this week's G7 bond sell-off and rate repricing 0:58 No Elvis this week, and introducing guest Andy Constan 1:55 The three forces behind the sell-off: fiscal, inflation, and hyperscaler issuance 4:46 Oil up 12%, landing on an economy already at full capacity 6:18 The CPI print, and why PCE inflation isn't getting to target this year 7:24 Treasury's underwhelming buyback announcement 9:11 Inside the first buyback operation: 10.5 billion offered, 3.6 billion spent 10:32 The ECB's hawkish meeting, and why the Fed can't afford to lag behind 11:58 The 10 year touching 5% for the first time since 2007 12:23 The 30 year through its cap, and how high it could still go 13:58 How much hiking is priced into the UK, eurozone and US 16:13 Why current yields aren't as extreme as they look against nominal GDP growth 19:04 Andy Constan: why the Fed has boxed itself into a corner 23:24 How much of the global hiking cycle is already priced in 25:14 Why the dot plot probably won't match what's priced into the curve 27:25 What actually moves the long end: growth and inflation expectations, not supply 28:20 Term premium then and now, and the case for long dated TIPS 30:23 Treasury's buybacks, the November refunding deadline, and Bessent's Yellen U-turn 37:06 The hedge: foreign stocks, gold, and a short dollar 38:10 Why equity valuations hinge on earnings expectations that may not hold 42:51 Every major AI-linked bond deal still trading underwater Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
#18
September 8 · 28 min
Bonds are a Trap
There is a generation of bond traders who have never seen yields this high, levels they would have dreamt of five years ago. The US deficit is running at 5.5 to 6% of GDP with the economy nowhere near a recession, and there is no political will in sight to fix it. That combination alone isn't the buy signal it looks like. Two live risks sit in front of this call. Wednesday brings the Treasury's buyback announcement, and Bessent has already said he will at least double the size, with room to go further. Friday brings the CPI print that Fed chair Kevin Warsh has effectively staked his credibility on, after reversing from downplaying inflation in July to calling the 2% target non negotiable at Jackson Hole. Elvis sits down with veteran macro trader Jonny Matthews, 25 years of institutional experience at Brevan Howard and Citigroup, to unpack why he isn't rushing to buy bonds despite the highest yields in a generation, what August's payrolls really mean for the Fed, and why Japan's own hawkish pivot is a warning against betting on long yields falling. In this episode: Why elevated yields reflect strength as much as strain, and the three forces, inflation, fiscal discipline and corporate supply, keeping them there The US deficit at 5.5 to 6% of GDP, with next to no political will to close it Nominal GDP running near 8%, and why Treasury yields still have catching up to do August's payrolls: a 106,000 six month average against the 30,000 to 35,000 needed just to hold unemployment steady Why the case for rent disinflation may already be stalling, against Fed governor Waller's dovish read PCE inflation above target for 64 straight months, with services alone contributing 2.5 percentage points Why the Fed's September decision now hinges almost entirely on Friday's CPI print What Japan's hawkish pivot did to its yield curve, and why it's a warning against being short long bonds Jonny has spent 25 years trading macro at the highest institutional level. This is not retail speculation or headline chasing. It is rigorous, independent analysis from someone who has sat at the table. New to SuperMacro? Get 30 days of our Daily Note entirely free at www.super-macro.com 0:00 Intro: do we buy bonds 0:51 The framing question, and why high yields alone don't mean buy 1:19 The three forces keeping yields elevated: inflation, fiscal discipline, corporate supply 2:50 Why higher yields reflect strength, not a debt doom loop 3:17 The deficit and debt to GDP since Clinton, the GFC and the pandemic 4:19 The 5.5 to 6% deficit, and why there's no political will to close it 4:54 Nominal GDP against the ten year yield, and the catching up still to do 6:32 Interest costs creeping from 3.5% to 4.5% of GDP 8:02 Entitlement spending, and Europe's worse position 9:44 This week's risks: Wednesday's buyback announcement and Friday's CPI 11:17 The yen, the BOJ's hawkish pivot, and Bessent's swap facility theory 13:12 Nonfarm payrolls: the call that played out, and cyclical versus non-cyclical jobs 15:08 The 106,000 six month average, and what it means for unemployment 17:31 PCE inflation, Warsh's reversal since Jackson Hole, and 64 months above target 20:31 Break even inflation at 2.4%, and the Fed's single data point trap 22:10 Waller's dovish dissent, and why rent disinflation may already be stalling 24:04 What Japan's yield curve just did, and why it's a warning on short bonds 26:01 Wrap up: still cautious, and the trade into September Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
#17
September 1 · 31 min
Warsh just backed himself into a corner
US interest costs have quietly climbed to around 18% of tax revenues, up from about 5% not long ago. At Jackson Hole, Fed chair Kevin Warsh delivered what looked like a near 180 degree hawkish pivot from his July meeting, sending the two year yield up 11 basis points in a day. The long end barely moved. Jonny thinks the pivot has less to do with inflation than pressure from the Treasury. Scott Bessent has been doubling bond buybacks and hinting at drawing on the $950 billion TGA to support long dated debt, and the two men meet weekly. A short end hike buys Bessent room to defend the long end without spending the Treasury's own firepower. Elvis sits down with veteran macro trader Jonny Matthews, 25 years of institutional experience at Brevan Howard and Citigroup, to unpack why the long end didn't budge despite the hawkish pivot, what a September hike really says about debt sustainability, and why he still likes gold and short bonds as the trade. In this episode: Warsh's near 180 degree reversal, from downplaying inflation in July to calling 2% a "firm fixed target" at Jackson Hole The two year yield jumping 11 basis points on the day, while the long end stayed exactly where it was Fed funds futures pricing close to 90% odds of a September hike, up from around 60% before the speech Why Jonny expects Friday's payrolls to beat the 55,000 consensus, after a seasonal 50,000 drop in government jobs last month The 30 year Treasury yield at 5.25%, driven mostly by rising real yields rather than inflation Break even inflation at 2.4%, up from a well anchored 2%, a sign of fiscal risk over price risk Why shifting issuance to the short end risks repeating what happened in Turkey's bond market Interest costs near 18% of tax revenues, and why debt sustainability is now a G7 wide problem, not just a US one Jonny has spent 25 years trading macro at the highest institutional level. This is not retail speculation or headline chasing. It is rigorous, independent analysis from someone who has sat at the table. New to SuperMacro? Get 30 days of our Daily Note entirely free at www.super-macro.com 0:00 Intro: did Warsh just kill the debasement trade 0:50 Warsh's hawkish pivot at Jackson Hole, and the 180 from July 1:53 Bessent's TGA hint, the doubled buybacks, and mixed signals from the Fed 3:17 The political trade off: a short end hike to save the long end 3:54 Line by line: what changed between July and Jackson Hole 6:04 Why short term rates are a blunter tool than they used to be 7:18 The labour market case: stable claims and the high frequency data 9:19 Why Jonny expects Friday's payrolls to beat the 55,000 consensus 11:12 The committee split, and fed funds futures pricing near 90% odds of a hike 13:36 December's dot dispersion, and whether it's one hike or two 14:24 Can the economy handle a 50 basis point hike 16:17 Why hiking still won't bring the long end down 17:01 The real driver of long yields: debt sustainability, not inflation 18:11 Break even inflation at 2.4%, and the purchasing power problem 21:27 Shifting issuance to the short end, and what happened when Turkey tried it 23:44 The chart showing fed funds and the 10 year yield decoupling 24:40 Borrower or lender: the devaluation bet, and the trade Jonny holds 28:14 Wrap up: interest costs at 18% of tax revenues, and the G7 wide problem Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
#16
August 25 · 30 min
Bessent’s Intervention Arsenal Lacks Firepower
The US national debt passed $40 trillion last week. Scott Bessent's response was to double the Treasury's bond buybacks, from $2 billion a time to $4 billion. Against $5.6 trillion of debt maturing in the 10 to 30 year bucket alone, that is roughly $100 billion a year, a fraction of what is actually coming due. Elsewhere, Bessent has sold euros to buy yen to stop Japan selling Treasuries, tapped the TGA to help fund the buybacks, and signalled in the August refunding statement that future issua
#15
August 18 · 28 min
Sovereign Bonds Can't Catch a Break
The data all pointed one way last week. Payrolls missed, CPI and PPI came in benign, retail sales underwhelmed across every single aggregate. Sovereign bonds caught a bid, then sold off almost immediately. When bonds cannot rally on their own good news, the problem is not the data. The US interest bill has now overtaken the defence bill. Niall Ferguson's law says any great power that spends more on debt servicing than defence risks ceasing to be a great power, and the US is running a deficit of 5.5 to 6% at full employment with unemployment at 4.1%. There is no reform coming, in any G7 country, because nobody is going to vote for it. Elvis sits down with veteran macro trader Jonny Matthews, 25 years of institutional experience at Brevan Howard and Citigroup, to work through why the long end sold off into weak data, what the deficit does when the economy finally turns, and why he is still short treasuries. In this episode: Why sovereign bonds sold off into a weak payrolls print, benign inflation and soft retail sales G7 debt to GDP ratios, and the US on track to pass Italy from over 120% Japan cutting 220% to 200% with no reform at all, just nominal GDP running above the interest rate A 6% deficit at full employment, and where it goes in even a mild recession Ferguson's law: the interest bill has passed the defence bill, and neither one is coming down AI capex arriving in the bond market as a new and very large competing issuer Ten years of long dated treasury total return below zero while CPI rose 40 to 45%, and what that does to the 60/40 Why TIPS at 2.4% on the ten year and 3% on the thirty look like the better bet 4.5% on the ten year and 5% on the thirty now acting as a floor rather than a ceiling Jonny has spent 25 years trading macro at the highest institutional level. This is not retail speculation or headline chasing. It is rigorous, independent analysis from someone who has sat at the table. New to SuperMacro? Get 30 days of our Daily Note entirely free at www.super-macro.com Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
#14
August 12 · 30 min
The Yen Intervention Is Smoke and Mirrors
In this episode: Why Treasury yields rose despite a negative payrolls print — and what a shrinking labour supply means for wages and inflation The unemployment rate at a 13-month low of 4.1% even as jobs are lost — the retiring boomers and net-zero migration story the headlines miss Bessent's "whatever it takes" moment: the leaked to-do list, the Exchange Stabilization Fund, and why this intervention is more theatre than firepower
#13
Apr 11, 2025 · 28 min
Navigating the Financial Storm: Insights on the S&P and Economic Data
In this episode of the Super Macro podcast, hosts Elvis and Jonny Matthews delve into the current turmoil in the financial markets, characterised by crashing stocks, soaring implied volatility, and rampant investor panic. Jonny highlights the ongoing forced unwinds and the diminishing confidence in the financial system, despite strong economic data. They discuss the impact of recent tariff announcements by the Trump administration, noting that higher-than-expected tariffs and shifting goalposts
#12
Mar 14, 2025 · 41 min
Tariffs and Their Impact: A Deep Dive into Economic Uncertainty
In this episode of the Super Macro podcast, hosts Elvis and Jonny Matthews delve into the pressing topic of tariffs and their impact on the economy. Jonny, who has been skeptical about the likelihood of a recession, discusses how current tariff policies are slowing growth, increasing prices, and disrupting global supply chains. The episode highlights the significant decline in business and consumer confidence, with companies putting hiring and capital expenditure plans on hold due to uncertainty
#11
Jan 22, 2025 · 38 min
Navigating 2025: Economic Insights and Market Predictions | Episode 11
In this episode of the Super Macro podcast, hosts Elvis and Jonny Matthews return after a brief hiatus to discuss economic projections for 2025. Johnny emphasises his confidence in the economy for the first half of the year, highlighting strong household and corporate balance sheets, alongside a robust job market. The conversation also touches on Johnny's successful year managing a portfolio for Fortum Capital, crediting his research and content creation for the impressive returns. Listeners are
#10
Oct 10, 2024 · 32 min
The Resilient US Economy: Consumer Spending and Corporate Profits | Episode 10
In this episode of the Super Macro podcast, hosts Elvis and Jonny Matthews dive into the recent economic performance of Ireland, discussing the optimistic outlook for the third quarter. Jonny highlights strong consumer spending trends, projecting a 3% growth rate and an overall GDP growth of around 2.5% for the quarter. They address previous concerns about consumers depleting their savings, revealing new revisions to national accounts that indicate higher household income than previously estimat
#9
Sep 26, 2024 · 30 min
Defending the No-Recession Stance - Episode 9
In this episode of the Super Macro podcast, hosts Elvis and Jonny Matthews delve into the current market dynamics and the prevailing economic outlook. Jonny stands firm in his belief that a recession is unlikely, despite increasing skepticism in the market. He emphasizes the importance of maintaining a non-consensus view to capitalize on investment opportunities. The discussion shifts to the Federal Reserve's recent actions, particularly focusing on the dovish stance reflected in the changes in
#5
Sep 16, 2024 · 25 min
What Recession?!! - Episode 8
In this episode of the Super Macro Podcast, hosts Jonny Matthews and Elvis delve into the current market dynamics and the looming recession narrative. Jonny shares insights on the disparity between market pricing and economic realities, particularly focusing on the rates market. He highlights that the market is pricing in approximately 275 basis points of cuts over the next 15 months, which he argues signals a deep recession—a scenario he believes is unlikely based on current economic conditions
#7
Jul 11, 2024 · 38 min
Financial Conditions and Market Reactions: A Conversation with Andy Constan - Episode 7
In this episode, Jonny Matthews and Elvis discuss the recent weak CPI print and its implications on the economy. They analyze the job market, highlighting the contrast between cyclical and non-cyclical sectors. Johnny emphasizes the significance of real disposable income growth and strong private sector wages. Stay tuned for a special guest, Andy Constand, joining the conversation later in the episode. Timestamps: 00:00:00 - Introduction and Welcome00:00:11 - Discussion on the Economy and
#6
Jun 9, 2024 · 29 min
The S&P's Resilience Amid Softening US Economic Data - Episode 6
On this episode of Super Macro, Elvis and Jonny discuss the recent subpar economic data in the United States and its implications for Fed policy. They analyze charts showing the softening data against Treasury yields and the S&P, noting the disconnect between the S&P's strong performance and weakening economic indicators. Tune in to gain insights into the economic surprise index and what this shift in data trends could mean for the future.
#5
Apr 16, 2024 · 45 min
Joseph Wang's Take on Central Banking and Market Predictions - Episode 5
In this episode of the Super Macro Podcast, hosts Elvis and Jonny Matthews are joined by special guest Joseph Wang, also known as the Fed guy. Joseph, a former senior trader on the New York Open Markets Desk, shares his insights on the evolution of the Fed, the impact of quantitative easing, and predictions for the future of the economy. The discussion covers topics such as the Fed's role in the financial system, the potential for rate cuts, and the implications of fiscal deficits on asse
#4
Apr 8, 2024 · 26 min
Analyzing the US Labor Market and Fed's Rate Cut Dilemma - Episode 4
In this episode of The Super Macro Management podcast, Elvis and Jonny Matthews dive into the US labor market and the potential for rate cuts. They analyze the recent payroll data, highlighting healthy gains in both cyclical and non-cyclical sectors. With a decrease in unemployment, an increase in average hourly earnings, and a rise in the working week, the labor market report appears strong. Jonny emphasizes the upward trend in payroll growth over the past four months, noting a recent res
#3
Mar 25, 2024 · 23 min
Has the Fed Lost the Plot on Inflation? - Episode 3
In this episode of Super Macro Podcast 3, Elvis and Jonny dive into the topic of whether the Fed has lost the plot on inflation. They discuss the Fed's recent decisions, including leaving interest rates unchanged, raising inflation and growth forecasts, and the potential impact on the bond market. Jonny believes the Fed has been too soft on inflation, expressing concerns about the end of goods disinflation and the rise in services and energy costs. While he doesn't think the Fed has comple
#2
Mar 14, 2024 · 36 min
Navigating the US Market: CPI Data, Payroll Reports, and Fed Policy - Episode 2
On this episode of Supermacro, Jonny and Elvis discuss the recent developments in the US market, including the CPI data and the non-farm payroll report. Despite the unexpected CPI print and mixed payroll data, Jonny maintains his view that the easing of financial conditions is stimulating the economy in ways the Fed may not have anticipated. The episode delves into the implications of Fed policy and the overall economic outlook. To access the SuperMacro newsletter and stay updated on econ
#1
Mar 1, 2024 · 36 min
Unpacking the Health of the US Economy: No Recession in Sight - Episode 1
In this episode of the SuperMacro podcast, Jonny discusses the health of the US consumer and the absence of a looming recession. He delves into charts showcasing the strength of the US economy, the impact of job gains, wage growth, and household finances. Elvis and Jonny also touch on the Federal Reserve's policies, inflation, and the future of interest rates. Join them as they analyze market trends, investment strategies, and more. Don't miss out on valuable insights and trade ideas share

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