Below is a brief excerpt and the "Chart of the Day" from today's Early Look note written by Hedgeye Macro analyst Christian Drake.
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Consider the chart trinity below. Now, if one was anticipating a reacceleration in inflation and a predominantly Quad 2 trajectory wrt to the growth vector in the GIP model, those charts carry little surprise value. Which is the (exceedingly simple) point: Get the slope of Growth & Inflation right, you get big things like the USD & Rates right while also front running the Policy reaction. A perpetual two-way policy maker-market communication loop. Simultaneously giving and receiving information, concurrently creating and reacting to policy, in a delicate dance of dynamic path dependence. Of course, much of the above is promotion masquerading as contextualization with the “what & how” remaining (purposefully) unanswered. I encourage you to tune into our 1Q25 Macro Themes Call this Wednesday at 11:00am ET where we’ll comprehensively answer the “now what.” |
