Not a Time for Big Bets | Aahan Menon on What 60 Years of Regime Data Says About Today’s Market
Aahan Menon, founder of Prometheus Research, joins Jack Forehand to explain what systematic macro data says about economic growth, inflation, Federal Reserve policy, oil prices, AI investment and the outlook for stocks and bonds. They examine why nominal GDP remains stable, why traditional recession indicators have failed, how consumer dissaving is boosting corporate profits, and why today's unusually balanced regime probabilities make this a difficult time for large macro bets.
Aahan Menon on X
https://x.com/AahanPrometheus
Prometheus Research
https://www.prometheus-macro.com
Topics covered
Why geopolitical volatility and disrupted market trends make concentrated macro bets unusually difficult
What Prometheus Research's daily GDP nowcast says about stable nominal growth
Why AI capital spending matters but consumer spending still drives the US economy
How household dissaving and the wealth effect are supporting corporate profits
Why the economy and Federal Reserve policy may be increasingly sensitive to stock prices
How oil prices are driving inflation volatility and changing expectations for interest rates
Why demand-driven inflation is more persistent than supply-driven inflation
How technology investment has weakened traditional recession and business-cycle indicators
The value and limitations of timing Federal Reserve policy with systematic macro data
What macro regime probabilities, valuations and expected returns suggest for stocks, bonds and diversification
Timestamps
00:02 Why this is a difficult time for big macro bets
05:02 A daily GDP nowcast shows stable nominal growth
09:21 Consumer dissaving and the future economic risk
13:23 The wealth effect linking stocks, spending and profits
17:52 Oil prices and extreme inflation volatility
22:23 Separating persistent demand inflation from supply shocks
27:27 Why traditional recession indicators stopped working
32:55 How technology is changing the business cycle
37:42 Why timing Federal Reserve cycles matters for bond returns
42:28 The limitations of alternative data and short histories
47:33 Macro regime forecasts and expected returns
51:54 Why the macro backdrop still supports equities
56:19 Why investors can finally get paid to diversify
Learn more about the Excess Returns podcast network:
https://excessreturns.co
No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.
Aahan Menon on X
https://x.com/AahanPrometheus
Prometheus Research
https://www.prometheus-macro.com
Topics covered
Why geopolitical volatility and disrupted market trends make concentrated macro bets unusually difficult
What Prometheus Research's daily GDP nowcast says about stable nominal growth
Why AI capital spending matters but consumer spending still drives the US economy
How household dissaving and the wealth effect are supporting corporate profits
Why the economy and Federal Reserve policy may be increasingly sensitive to stock prices
How oil prices are driving inflation volatility and changing expectations for interest rates
Why demand-driven inflation is more persistent than supply-driven inflation
How technology investment has weakened traditional recession and business-cycle indicators
The value and limitations of timing Federal Reserve policy with systematic macro data
What macro regime probabilities, valuations and expected returns suggest for stocks, bonds and diversification
Timestamps
00:02 Why this is a difficult time for big macro bets
05:02 A daily GDP nowcast shows stable nominal growth
09:21 Consumer dissaving and the future economic risk
13:23 The wealth effect linking stocks, spending and profits
17:52 Oil prices and extreme inflation volatility
22:23 Separating persistent demand inflation from supply shocks
27:27 Why traditional recession indicators stopped working
32:55 How technology is changing the business cycle
37:42 Why timing Federal Reserve cycles matters for bond returns
42:28 The limitations of alternative data and short histories
47:33 Macro regime forecasts and expected returns
51:54 Why the macro backdrop still supports equities
56:19 Why investors can finally get paid to diversify
Learn more about the Excess Returns podcast network:
https://excessreturns.co
No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.
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