The selling pressure in equities and bid in bonds is not just about the labor market print but falls into a larger macro context that will determine HOW MUCH downside in risk assets exists

🧵 I have been laying out the larger structural reality of higher nominal GDP growth and the credit cycle. Within this, there will always be positioning unwinds where traders overextrapolate single data points.

The actions of the Fed, equity market dispersion, and interest rates are all converging to set the next stage in the cycle

These relationships are going to become increasingly difficult to navigate as capital shifts across the risk curve

Let's dig in🧵👇 We have seen Powell come out more hawkish, and the inflation print this morning came out above expectations

However, the action of Powell to decrease the probability of a Sept cut helped the yield curve to flatten as 10 year inflation swaps fell marginally.

We are seeing consensus, and the media continues to misinterpret the macro regime we are in, as well as short-term positioning heading into FOMC

The FOMC meeting is likely to be a macro inflection point for liquidity that will reverberate across all markets🧵👇 The critical chart that frames WHERE we are on a big picture basis is 1 year inflation swaps pricing in MORE inflation risk and credit spreads showing incredibly accommodative financial conditions.

When you realize that the entire context is 1) Inflation risk and 2) credit spreads are low enough for the Fed to be less dovish then it changes how you think about FOMC today

This Credit Cycle Was Made by Central Banks—and Will End With Them

All The Charts For The Credit Cycle - Breakdown 🧵👇 I recorded an entire video on how the credit cycle is developing here. I am going to go through each chart from the video and further explain it below

https://x.com/Globalflows/status/1946788096743502081

Some important things for macro flows this week: 🧵

We remain in a regime where stocks are skewed to the upside and bonds are skewed to the downside. Within this skew, we are going to see traders begin to get positioned for FOMC. Between now and FOMC, the major prints are the JOLTS and ADP print Irrespective of popular narratives, we know there isn't significant weakening in the labor market as the last JOLTS and NFP prints causes selling pressure in long duration bonds

We are likely to remain below the NFP level as we progress into FOMC

The market is made up of various agents

Each of these agents has different expectations and constraints

When these agents diverge, markets shift and price the differential. It is when these agents capitulate at the same time you get massive melt-ups and melt downs

🧵👇 The main agents in the system are the following:

Investors (Retail and Institutional)

Central Banks

Firms (Corporate Executives)

Households (Consumers)

Policy Makers (Governments)

Financial Intermediaries (Banks, Insurance Companies, Hedge Funds)

After the close today, the S&P 500 has put up a 7.83% YTD return despite the tariff risk drawdown in Q1

The important thing to understand is WHY this return has taken place because if you can understand the underlying drivers, you can understand WHERE we are going

🧵👇 The first thing to take note of is that the underlying economy continues to grow at a consistent rate ABOVE 2%.

The Atlanta Fed nowcast is back at 2023 levels:

Expectations of a recession and rate cuts continue to be a fundamental focus for the media and the Fed, which is exactly why markets are repricing in the opposite direction

The credit cycle is in full swing, which is creating more inflation risk

This is setting the stage 🧵 As we entered this year, the media and influencers who sell fear continue to find any reason they can to show a recession. This is very typical behavior during market melt ups as disbelief sets in.

The Atlanta Fed nowcast and Bloomberg Nowcast indicate growth is running well above 2%

The Macro Regime is approaching a point in time where the probability of long end yields blowing out to the upside is increasing

Positioning is not expecting this, and a repricing of interest rates will reverberate across equities, BTC, and FX

Let's dig in 🧵👇 Ever since the beginning of the rate-cutting cycle in 2024, longer term interest rates have continued to shrug off recession risk and push higher. This is an indication that as the Fed is cutting and pausing, long term nominal GDP expectations are accelerating.

Volatility is beginning to expand in interest rates and FX, which is setting the stage for the macro end game

The strong labor market, resilient growth, procyclical fiscal policy, and policy error by the Fed are setting the stage for what comes next

Let's dig in 🧵👇 One of the least appreciated views that continues to catch investors offsides is how everything is becoming more and more leveraged to interest rates.

We are in a period of time where growth, inflation, fiscal policy, and monetary policy ALL keep moving in the same direction at the same time. What is the result? Melt ups and melt downs as correlations converge.

x.com/Globalflows/st…

The Pause That Traps

Why the Fed’s wait-and-see stance is more dangerous than it looks

🧵👇 The Fed has held rates steady at 4.25–4.50% since Jan. But beneath the calm, pressure is building. Inflation is falling, yes—but deficits are still massive, long yields remain elevated, and the margin for error is razor thin.

Here is a comprehensive breakdown of the tools and educational resources for understanding how capital flows are impacting interest rates, equities, Bitcoin, and gold (FREE)

“You wasted $150,000 on an education you coulda got for $1.50 in late fees at the public library.”

🧵👇 1) Book recommendations on global macro

https://x.com/Globalflows/status/1923448371378807146

The macro picture is confounding positioning in both interest rates and equities

The economic data prints today are sending a signal that will reverberate across asset markets

The main idea: NO RECESSION

🧵👇 The idea I have been consistently laying out is that a recession is highly unlikely right now. This is why I have been long equities

https://x.com/Globalflows/status/1934603377717178881

The macro regime has made a short-term shift from bear steepening to bull steepening in 10s30s

This has implications for risk assets, gold, and FX, especially since volatility is so low right now

Let's dig in🧵👇 Let me first start with, if you don't have a correct understanding of WHY the yield curve is flattening or steepening, you will never know WHERE we are likely to move.

This is why I wrote a comprehensive primer on understanding interest rates here:

https://x.com/Globalflows/status/1792913231780196815

Last week, Powell made his comments about the Fed's stance, and this has set the stage for bonds as we move into the labor market prints this week

This is going to further squeeze out positioning in equities and interest rates

Let's dig in 🧵👇 Main idea is that economists and macro strategists have had the expectation that a recession was a considerable probability this year due to the tariffs.

The chart below shows their expectations of a recession. It was previously at 40% and is beginning to move down as they realize they were wrong.

The US financial system is on the verge of a massive boom in BOTH the underlying economy and the financial system

These types of booms occur when the Fed makes critical errors. Powell sent a clear message to the market that he is way more dovish than justified.

🧵👇 For months now, I have been systematically laying out all of the drivers for the credit cycle that are occurring under the surface. The main idea is that banks were telling everyone a recession was likely at the same time they kept shooting credit into the system:

https://x.com/Globalflows/status/1917275348367982946

As we move into FOMC, understanding HOW the curve is pricing the Fed's action and what you watch will be critical

Powell has already made mistakes over the last 3 months and now the pressure from Trump is going to compound them

Let's dig in 🧵👇 When we understand HOW the stance of the Fed relates to markets then we can know that 30 year interest rates have been rising for almost a year now. This is taking place as the Fed takes a "neutral stance."

The result? A large gap is forming

A massive rate futures position is taking shape: traders are betting that the next Fed chair — post-Powell — will move to cut rates aggressively starting mid-2026.

This has triggered record SOFR fly flows and distorted curve structure. Let’s walk through what’s happening 🧵 The core of the bet:
→ Sell Mar 2026 SOFR
→ Buy Jun 2026 SOFR
This anticipates that Powell’s successor, potentially appointed by Trump, would ease policy quickly after taking office.
📊 Chart: SOFR fly distortion and volume spike

In the aftermath of pandemic-era QE and rising fiscal dominance, US regulators are now moving to adjust capital rules that affect how banks intermediate the $29T Treasury market.

The proposed shift targets the enhanced Supplementary Leverage Ratio (eSLR)—a structural constraint in the balance sheet era.
🧵 At the center is the enhanced Supplementary Leverage Ratio (eSLR) — a key capital requirement for the biggest US banks like JPMorgan, Goldman, and Morgan Stanley.

Today, it forces banks to hold capital against even the safest assets — including Treasuries.

BTC charts showing WHERE we are: 🧵

My view is we are moving higher because macro liquidity is expanding and this geopolitical risk is likely to fade. The Credit cycle is in full swing

Monthly returns for BTC have been positive over the last two months As I laid out here equities are likely to melt up and BTC will move in lockstep with this.

https://x.com/Globalflows/status/1934603377717178881

1/
@elonmusk AI startup, @xai, is on pace to burn over $13B in 2025—more than $1B/month.
Revenue? Just $500M this year.
Next year? $2B projected.

The funding treadmill is accelerating faster than the product.

Here’s the full breakdown 🧵 2/
xAI just merged with X and is raising $9.3B in equity + debt.
Over half will be spent in the next 3 months.
They're also planning to raise another $11.4B next year.

Burn rate like this is unprecedented—even by AI standards.