MACRO FLOWS 🧵

Every asset lives on two axes of risk:

Duration risk → how inflation erodes value over time

Credit risk → how growth enables or undermines repayment

These forces connect across the entire risk curve. Understanding them is the foundation of macro attribution Duration risk = time.
The longer you wait to be paid, the more exposed you are to inflation and rate shifts.

Credit risk = solvency.
The weaker growth is, the higher the chance of default.

Inflation amplifies duration risk.
Growth amplifies credit risk.

Positioning in Gold and Bitcoin right now is at a bit of an inflection point

These are very important to know in relation to macro flows, and if we hold these 110k levels in Bitcoin 🧵 First, gold skew has been blowing out as traders pay a premium to have long exposure

This is directly connected to how we are seeing the Fed's stance as they allow cuts to be priced into the forward curve post Jackson Hole. The red line shows 25DC vs 25DP implied volatility.

The NFP print today and other labor market prints we have seen this week fall directly in line with the credit cycle flows that are taking place

Here is a full breakdown of how the flows are functioning and what is likely to take place into FOMC 🧵 When we were at the lows in equities earlier in April, it was clear that a recession was NOT on the table due to the resilience in the labor market. However, the market was pricing almost 150bps of cuts for 2025 in the Z5 SOFR contract. Since that time, the entire forward curve has unwound to price LESS cuts. The last NFP print was the data release that set the low in the Z5 SOFR contract but this also overlapped with the Fed beginning to overemphasize growth as opposed to inflation risk in their rhetoric.

After all the labor markets this week, we are now at a points where the forward curve is pricing almost 75bps of cuts for this year which means a 25bps cut at all of the 3 remaining meetings for this year.

Mapping the Risk Curve and How Credit & Duration Risk Shape Every Asset 🧵

This is HOW you can know WHEN the credit cycle is likely coming to an end

(bookmark this one) The “risk curve” is the map of capital flows.
On the far left sit safe assets—cash, T-bills, short Treasuries.

Move outward and you climb the ladder: investment grade bonds, high yield, equities, emerging markets, private credit, crypto.

This is how capital rotates.

Everyone maps the credit cycle as “sentiment shifts.”

Hope>Optimism>Belief>Thrill>Euphoria>Complacency>Anxiety>Denial>Panic>Anger>Depression>Disbelief

That framing is outdated because it misses the real driver: macro flows across balance sheets🧵 The cycle isn’t psychology.
It’s accounting.

Balance sheets expand when nominal growth outpaces discount rates.

Flows push outward along the risk curve—not because investors “feel good,” but because debt service improves.

The Time Bomb of Duration Risk 🧵
1/ Duration risk is the silent killer in portfolios. It’s not about price today; it’s about how much tomorrow’s cash flows are worth when inflation and interest rates move. Every asset has a clock built into it. A 30-year bond? Long clock. A 3-month T-bill? Short clock. The longer the clock runs, the more uncertainty inflation injects into those future dollars.

While many people have misunderstood the changes in the yield curve over the last 3 years, we are seeing a clear indication that recession risk remains LOW and nominal growth is rising

The changes in the curve and currency that will frame all flows as we move into FOMC

🧵👇 As we see an increase in the amount of government debt in the system, everything is becoming leveraged to changes in interest rates in a more concentrated way.

When debt to GDP is this high (chart below), the government won't have issues refinancing but they will have issues in how this transmits through the economy, balance of payments, and currency.

Several macro points I have been thinking about as we move out of Jackson Hole and toward the Sept FOMC meeting 🧵

1) Powell is explicitly misunderstanding or reframing the actual data with the same “transitory” lens he used in 2021. There is no such thing as “one-time price increases.” This is a cop out for inaction. 2) Powell is saying that 1 year inflation swaps are not high enough for him to consider things unanchored

This is a policy error of being overly accommodating, and WHY the DXY is down YTD

THE ILLUSION OF MONEY 🧵

Most people think of money as something concrete, cash in hand or deposits in a bank account. That is an illusion. Money is not a fixed thing. It is a web of asset and liability relationships across the entire financial system. Your deposit is an asset to you but a liability to the bank. A Treasury bond is an asset to investors but a liability to the government. Strip it down and you see: every dollar is a claim. Money is a balance sheet relationship.

Everyone has become a Fed watcher, but no one understands HOW the flows of capital are happening

As we move into Jackson Hole this week, we are very likely to see a shift in monetary policy, but the key will be understanding HOW this is transmitted into markets

🧵👇 If you understand the macro context for flows and how positioning is set up, then you will understand how Jackson Hole will be transmitted into markets.

This will frame all of the changes we see in interest rates, equities, and crypto.

We are seeing an incredibly aggressive compression in FX volatility as stocks bid and bonds face significant headwinds

This is directly linked with the credit cycle thesis I have been laying out

Let me break down 3 important things to watch for this 🧵 1) FX volatility is inherently linked with the VIX and MOVE Index.

Notice these move in lockstep which makes total sense because every asset is not only a view on the underlying security but also the currency its priced in.

Cuts or hikes by the Fed are not inherently bullish or bearish for the credit cycle

It is all about HOW these relate to underlying growth and inflation

If you can understand this relationship+positioning, you can know WHEN to exit the train before the bear market 🧵👇 I have been laying out the bullish view for equities for months now and have been running long trades in equities and Bitcoin. You can see the initial views and trades I laid out here:

https://x.com/Globalflows/status/1955320999068700677

The price action in stocks continues to confirm the macro regime I've laid out

1)The Credit Cycle is in full swing, causing melt-up mode
2)Inflation risk is greater than recession risk

All of this is coming to the macro end game moment where volatility shocks everyone 🧵👇 On the CPI print today, we are seeing stocks UP and bonds DOWN. Why? because we need to unwind all the bears who thought a single NFP print meant a recession.

As I laid out earlier this week, the play continues to be stocks bidding and bonds at risk of selling off

https://x.com/Globalflows/status/1954673126471836025

Memecoins, Crypto, and Macro Liquidity: 🧵

We are seeing capital move out the risk curve and buy assets that have excessive attention due to the changes in cultural consumption patterns

All of these flows are connected I have already laid out how Bitcoin is a release valve for macro liquidity. This is HOW you frame the drivers for predicting the price of Bitcoin

https://x.com/Globalflows/status/1953525747349586218

As we move into the CPI print this week, flows are going to adjust for higher inflation risk

The MAIN idea for the next month: Inflation Risk Is GREATER Than Recession Risk

This is a full breakdown of the context and flows into inflation prints this week 🧵👇 Consensus is expecting a 10bps acceleration in core CPI. What people continue to get wrong is that they think inflation is only tariff-driven and thereby transitory. This is creating a gap in markets where the Fed and other people are "looking through" inflation.

The next move in interest rates will be a direct result of inflation risk and the credit cycle

Here is a full breakdown of WHERE we are with interest rates and whether cuts/hikes are bullish/bearish for equities and Bitcoin

🧵👇 The first point to understand is that rate cuts are not inherently bullish or bearish for risk assets. Anyone saying this is using recency/confirmation bias.

I laid out in this video that we can have cuts or hikes by the Fed and risk assets can move in either direction. What determines this? How the rate cuts and hikes related to underlying growth and inflation.

x.com/Globalflows/st…

Everyone expects the next Fed chair to be extremely dovish, which is setting up the entire market and economy for a massive disappointment

If the Fed cuts rates into accelerating inflation prints, it will create a significant risk for markets and the underlying economy 🧵🧵 While financial news only focuses on the 1st order effects of the Fed and the economy, the market is AWLAYS pricing the full distribution of 2nd and 3rd order effects.

This is why 1 year inflation swaps are at 2021 levels. They are pricing the risk of higher inflation and indicating that the Fed's stance is too accommodative.

The Macro Regime, Credit Cycle, and Stance of the Fed are in the process of being tested

As we approach CPI next week, the flows of capital will show the moment of truth for everyone about WHEN a recession will happen and HOW HIGH interest rates can actually go

🧵👇 Over the last 3 years we have seen shocks to the US economy and every single time, the economy says the same thing: Growth is resilient, the consumer is fine, and the music is still playing.

The historic rise in interest rates due to the Fed hiking? Not a problem. The US economy put up some of the largest real GDP numbers in 2023 following the hiking cycle.

As we have questions circling about how valid US data is, how much recession risk exists, and if Powell is even doing the right thing, the most important starting point for managing risk is by asking

1) What is currently priced by markets?
2) Is this likely to happen?

🧵👇 Right now, we are seeing a lot of people use the language of "well, everyone I know isn't talking about x" or "everyone on Twitter doesn't even recognize y"

BITCOIN THREAD with all of the charts, models, and macro views to understand the drivers and WHERE we are likely to move

you're going to want to bookmark this one anon

🧵🧵🧵🧵 The Bitcoin primer that explains how all of the macro flows connect to the real-time price action is here: capitalflowsresearch.com/p/the-melt-up-…

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.