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Macro Mechanics
  • Macro Mechanics
Evaluating Treasury Exposure
In this note, we share our thoughts on the macro mechanics at play in the context of the current economic cycle. If well received, we will continue to share these Macro Mechanics. Let us know in the comments below. Bonds are the present value of future cash flows whose…
  • Macro Mechanics
Macro Mispricing Limited
In this note, we share our thoughts on the macro mechanics at play in the context of the current economic cycle. If well received, we will continue to share these Macro Mechanics. Let us know in the comments below. Despite significant macroeconomic volatility over the last few years, we…
  • Macro Mechanics
Treasuries: FOMC & QRA
In this note, we share our thoughts on the macro mechanics at play in the context of the current economic cycle. If well received, we will continue to share these Macro Mechanics. Let us know in the comments below. Monetary and fiscal policy are dominant drivers of treasury markets….
  • Macro Mechanics
Commodities: A Function Of Manufacturing Tightness
In this note we share our thoughts on the macro mechanics at play in the context of the current economic cycle. If well received, we will continue to share these Macro Mechanics. Lets us know in the comments below. At the macro level, commodity prices are a function of…
  • Macro Mechanics
Treasury Markets: Policy Rates & Term Premia
Changes in the yield of a Treasury security inversely drive the total return on the security. These yields have three components: the realized policy rate, the expected policy rate, and a term premium. We deal with each of these components individually. The realized short rate of the policy rate…
  • Macro Mechanics
Understanding Treasury QRA
This week, the Treasury will release its Quarterly Refunding Announcement (QRA), detailing the estimated supply of Treasury securities over the first half of 2024. Given the recent trends in government spending, this has begun to impact ongoing macroeconomic conditions significantly. We will reserve our detailed, data-driven assessment of the…
  • Macro Mechanics
Equity Market Outlook
Equity markets have posted some of the strongest relative price performance gains this year, as fixed-income assets have suffered the impacts of the Fed’s tightening cycle. As we approach what looks like an interim top in the hiking cycle, we think it is important to take stock of the…
  • Macro Mechanics
Monitoring Liquidity Dynamics
Liquidity conditions are at a complex juncture, with significant cross-currents and varying market impacts. As such, we think providing a detailed dissection of liquidity dynamics is essential better to understand the path for asset markets and the economy. First, we revisit our understanding of liquidity and then move on…
  • Macro Mechanics
Evaluating The Short Bond Trade
Three months ago, conditions lined up for us to think there was significant potential for a bond market sell-off, along with a steepening of the yield curve. That probability has largely borne out. Today, we take stock of the drivers of that move and provide our updated thoughts on…
  • Macro Mechanics
Is Monetary Policy Ineffective?
Policy rates have risen in historic fashion, but activity remains resilient. Monetary policy lags are well known, but the drivers of lags are less discussed. We offer our thoughts on the mechanics of policy transmission. Over almost every economic cycle, the Fed responds to high inflation by raising interest…

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