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2/ The Prometheus ETF Portfolio aims to allow everyday investors to access an investment solution that combines active macro alpha, passive beta, and strict risk control, all in an easy-to-follow, low-turnover model portfolio. The results speak for themselves: 
2/ Over almost every economic cycle, the Fed responds to high inflation by raising interest rates. The increase in these interest rates is pushed through the banking system and through asset prices to create a tightening of financial conditions...
2/ Th treasury has now extended the duration of its issuance while the Fed continues to keep interest rates elevated and roll off its balance. The combination of these pressures is a tightening of liquidity conditions. The mechanics of how these factors come together to paint...
2/ Before we dive into the impacts, we think it is important to describe the mechanical impact of Treasury issuance. There are two major impacts. The first is the effect on nominal GDP, and the second is the impact on the liquidity ecosystem.
2/ Before we start discussing the drivers of recession, we think it is important to define how we think about recessions. The technical definition of a recession and its classification is defined by the NBER. While this is a fairly rigorous evaluation...
2/ Previously, we have shared our bottom-up analysis of inflation subcomponents to assess where inflation will land. We will once again share those estimates with our subscribers soon. For the purposes of this post, we will outline our thoughts on the macro drivers of inflation.
2/ Starting with the bottom- line: 
2/ Let us first begin by defining liquidity & why it matters. In our definition, liquidity is the flow of cash and cash likes assets that potentiate spending in both the financial & real economy. Importantly, liquidity is a measure of balance sheet potential. We explain further..
2/ Real estate is part of GDP under the category of investment. It is an important variable, as while it does not account for a very large part of total GDP, it has significant variability, which can meaningfully impact GDP growth..
2/ As macro investors, we are trying to understand how the biggest themes in the economy drive asset prices. At the end of the day, our objective is to use our understanding to express more well-informed views than others in markets to generate outperformance...
2/ We project recessionary conditions beginning in H1 of 2024, and big-picture conditions continue to paint the path to a recession. 
2/ There are two dimensions two liquidity: private-sector liquidity and public-sector liquidity. The Fed’s slowing of its liquidity drain has stabilized public sector liquidity. On the other hand, sustained nominal income has continued to flow through to private sector liquidity.
2. This is because PMI respondents manage inventories and orders in response to their outlook on revenue and profitability.
2. Typically, when output has declined, employment has followed suit. We show this in the visualization above.
2. Above we show the monthly evolution of the data relative to its 12-monthly trend and consensus expectations.
2. However, we think it is important to note that excluding food and energy, i.e., core CPI, was up 0.40% this month— implying a 4.9% annualized rate for core inflation. This data is far removed from the Fed’s objective.
2. Our pre-view note mentioned two factors we would be watching out for. First, we were looking to see whether #motor vehicle inflation remains persistent.
2/ Fiscal spending can come from one of three places. Existing cash, new borrowing, or revenues. So far, cash spending has dominated: 
2. Above, we show our estimates of the monthly changes in US government spending. We decompose this spending into its sources, i.e., government revenues, borrowing, and cash balances.