You have to be willing to "fade yourself."
At a wedding, I explained to a friend what my edge is as a money manager, by saying, "I’m a moron because of my emotions, but my systems are brilliant."
He replied, "So sometimes you have to fade your emotions.”
Perfect insight, even without a finance background.
Now, I’m not claiming the Fed made a mistake, but the bond market and my signals suggest they have.
In 2018, rising rates and TLT pointed to disinflation. Today, with rates being cut and TLT falling, the bond market signals the opposite—inflation is on the horizon.
If bond prices keep falling, it likely signals expectations of rising inflation or stronger economic growth.
I’m personally betting on higher inflation. As we enter this inflationary cycle, we’ll fluctuate between inflation and disinflation.
Since early 2022, most commodity prices (except precious metals) have dropped, mirroring the pattern from the 1974 peak that bottomed in 1976.
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