LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. Every macro story collapses into the curve. Growth, inflation, policy stance, dollar direction, credit appetite, equity rotation. All of it shows up in where the front end and back end sit. The yield curve in itself is not a directional rate signal. The four regimes are bull steepening, bear steepening, bull flattening, and bear flattening, and each represents a specific combination of where the Fed is making a policy error against where growth and inflation are heading. Read the regime, and the macro stops being disconnected data points and becomes a single coherent signal.

2. 5s30s sitting above 2s10s right now is the cleanest growth resilience signal in the market. When the longer duration curve is steeper than the shorter duration curve, you are seeing more sensitivity to long-term nominal growth than to Fed policy. If growth were actually breaking, 5s30s would compress against 2s10s as the long end signaled real economy weakness. We are not seeing that. The curve shape is consistent with the credit cycle melt-up extending, not breaking.

3. PCE headline ticked up 70bps month over month. Core stayed contained. That distinction is the single most important macro question heading into the next month. If crude pass-through stays at the headline level and does not transmit into core, long-end rates have a ceiling and equity multiples hold. If core reaccelerates, the long end has to price more inflation premium, which forces the bear steepener and crushes equity multiples through the discount rate channel. The market is pricing the contained outcome right now.

4. Long-end rates kill equity multiples through the risk curve, not through the Fed. If you can buy the 30-year Treasury at 5 percent yield, that is much less risky than buying the S&P at a 2 percent yield. As long-end rates rise, capital reallocates away from risk assets toward the risk-free rate. The Fed only controls the short end. Growth and inflation control the long end. The long end is what determines whether equity multiples expand or compress, not the Fed funds rate.

5. Z7 held the level we mapped yesterday and ES bottomed intraday at the same level. Yesterday I called out 96.340 on Z7 as the level capping the downside in bonds, gold, silver, and EURUSD. Today ES made its intraday low at the exact same level mechanically because the equity discount rate is anchored to the same Fed reaction function pricing through Z7. EURUSD, gold, silver, and ES are all in the same correlation cluster because they all price off short-end rates. Trading one asset means understanding all of them.

6. Z7 has limited downside but limited upside from here. That makes it a fade trade, not a directional trade. Going much lower requires the Fed to actually hike, which the data does not support. Going much higher requires aggressive cuts, which Warsh’s framework does not justify in the immediate term. The trade is not Z7 itself. The trade is the second and third order effects in EURUSD, gold, silver, and equity multiples that move when the cluster reprices around Z7.

7. The Qualcomm catch-up trade is up 44 percent from the $135 entry on leaps. That is the framework working in real time. James called Qualcomm at $135 a few weeks back. Capitulation wick below the range, every other semiconductor competitor bidding, and the company forgotten by FinTwit. Downside limited, upside asymmetric. Now we are up 44% on the equity. This is what happens when you align a cross-asset macro framework with single-name idiosyncratic setups. The melt-up creates these catch-up trades constantly.

Slide Deck and Playbooks

In the slide deck from the livestream, you can find the full breakdown of all the ideas and moving parts I covered.

Capital Flows Livestream 2026 04 30

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Us Interest Rates Trading Tactical Playbook (5) (5)

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• Yield Curve Model From Tradingview: LINK

Tomorrow’s Livestream: Capital Flows | End of Week Wrap: How Interest Rates Cause the Rise and Fall of Nations

Tomorrow is the end of week wrap. We pull together everything that happened this week from FOMC through PCE, but we widen the lens significantly. Interest rates are the price of time and the price of money, and across history, they are the single most important variable that determines which nations rise and which nations fall. In a globalized world with excessive government spending across every major economy, tracking capital flows is the entire game. We map why the dollar, the curve, and cross-border flows are doing what they are doing, what that means for the next leg of the credit cycle, and why this framework is the only way to navigate a world where every government is running deficits and every central bank is repricing its framework at the same time.

TOMORROW’S LIVESTREAM: LINK

The information on this website/Substack is for information purposes only. It is believed to be reliable, but Capital Flows does not warrant its completeness or accuracy. The information on the website/Substack is not intended as an offer or solicitation for the purchase of stock or any financial instrument. The information and materials contained in these pages and the terms, conditions and descriptions that appear, are subject to change without notice. Unauthorized use of Capital Flows websites and systems including but not limited to data scraping, unauthorized entry into Capital Flows systems, misuse of passwords, or misuse of any information posted on a site is strictly prohibited. Your eligibility for particular services is subject to final determination by Capital Flows and/or its affiliates. Investment services are not bank deposits or insured by the FDIC or other entity and are subject to investment risks, including possible loss of principal amount invested. Your use of any information which is proprietary to Capital Flows or a third-party information provider shall only be used on individual devices without any right to redistribute, upload, export, copy, or otherwise transfer the information to any centralized interdepartmental or shared device, directory, database or other repository nor to otherwise make it available to any other entity/person/third party, without the prior written consent of Capital Flows.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. The Z7 SOFR contract at 96.340 is the single most important level to watch through FOMC and the PCE print. Z7 is pricing twenty five basis points of cuts between now and the end of twenty twenty seven. We are approaching the level that would represent a complete pause through that horizon. If we move there and hold, that caps the downside in bonds, in gold, in silver, and pushes EURUSD higher. The Z7 contract has already made a new low while ZT has not, which means the front end is leading the curve repricing. That divergence is the cleanest signal we have for where the Fed reaction function is heading post-Warsh.

2. Interest rates are the asymmetrical linchpin on which the entire economy turns. Everything is a pair trade. When you buy the S&P, you are also fundamentally getting short dollars. Every asset is denominated in a currency, and every currency is priced off short-end interest rates. Recessions are fundamentally about a revaluing of the currency. Once you internalize this, the FOMC meeting stops being about the rate decision and starts being about how the meeting reprices the relative value of every asset against the dollar. That is the framework for trading these meetings, not the binary of cut versus hold.

3. The market is pricing 100 percent probability of a hold today. That means everything that matters is in the second and third order effects of the comments, not the decision itself. When the forward curve prices a meeting at one hundred percent probability of a particular outcome, the decision is already in the price. The Fed does not surprise the market when it is fully priced. The market reacts to whatever Powell signals about future actions, the dot plot revisions, and how he frames the legacy of his tenure as Warsh comes in. Reading FOMC means reading what is not priced, and the curve repricing post-meeting is the actual signal.

4. The move index has been decoding the crude-to-inflation transmission through positioning. It moved up when crude initially rallied, but it is no longer responding to crude moving higher. That is a positioning unwind signal. Bond traders hedge inflation risk through crude calls. When the initial crude shock hit, the move index spiked because positioning was caught offside and traders had to buy convexity. Now crude is rallying but the move index is not following. That tells you the crude move is fully expected and traders are no longer caught offside. The asymmetric risk in interest rates has compressed even as crude continues to bid. This is the exact setup that allows real rates to keep falling without breaking the bond complex.

5. Z7, gold, silver, and EURUSD are moving in the same correlation cluster because they all reflect the Fed reaction function. EURUSD is the cleanest expression right now. Everything in this cluster prices off the same input: how aggressive the Fed will be with cuts. If Z7 holds the 96.340 level, the entire cluster bottoms together. EURUSD has been outperforming the cluster on the way up, which makes it the cleanest long expression. Gold and silver are the second cleanest, with limited downside if Z7 holds. Bonds are neutral because the Fed is unlikely to cut into rising inflation expectations in the near term, but the curve does not break either.

6. Long-end interest rates price long-term nominal GDP. Short-end rates price the Fed’s actions. The spread between them is where the policy error transmits. Right now, the ten year is above the two year, which uninverted last year. That means the market is pricing positive growth and a Fed that is not breaking the economy. If the Fed holds rates here while inflation expectations rise, the long end has to price more inflation premium, which steepens the curve further. That is bear steepening, and it is consistent with the inaction-into-supply-shock framework Warsh has been describing. The curve shape is the cleanest read on whether the Fed is making a policy error in real time.

7. Powell needs to push back on the Warsh legacy framing today, but the path of least resistance is to take the high road and exit cleanly. Warsh used his testimony to frame Powell’s tenure as a fundamental policy error. The 2020 inflation framework change is the specific point of attack. Powell can either defend the framework, which would force a more hawkish stance to validate the legacy, or take the high road and let Warsh inherit a clean baseline. The smart money is on the clean exit because Powell has played this game tactfully throughout his tenure with near zero dissent on the FOMC. The framework change comes from Warsh, not from Powell going out with a bang.

8. Powell is also a lens for the committee Warsh inherits. The questions about his legacy are functionally questions about how easy or hard the regime change will be. When reporters ask Powell about his legacy today, what they are really asking is whether the committee will go along with Warsh’s reform agenda or resist it. Powell’s framing on those questions tells you how unified the FOMC is around the existing framework versus how open it is to change. That tells you the speed at which Warsh can implement the regime change once he takes over. The committee dynamic is the actual variable to track post-meeting.

Tomorrow’s Livestream: Capital Flows | Agentic Macro Trading | The Yield Curve, Inflation Risk, and Why the Curve Determines Risk Assets Through Earnings

Tomorrow, I will map how the yield curve connects to inflation risk and why watching the curve shape is the cleanest tradeable signal as we move through the earnings of the largest companies in the index. The curve is the mechanism through which the Fed’s policy error transmits into risk assets. Bear steepening, bull steepening, flattening, and inverting all signal fundamentally different things about inflation, growth, and where capital wants to flow next. With Powell exiting and Warsh setting up the regime change, the curve is going to do most of the work in repricing risk assets through the next two weeks of mega-cap earnings. I break down the specific curve relationships, the inflation transmission, and what that means for IGV, the Russell, and the broader index heading into the heaviest earnings window of the year.

TOMORROW’S LIVESTREAM: LINK

Paid Subscribers: Post FOMC Hedging Pressure Signal

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LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. Powell vs Warsh have fundamentally different views on what inflation actually is. That gap is the framework handoff. Powell believes inflation is something that happens to the Fed and the Fed responds to it. Warsh believes inflation is the Fed’s choice. That single difference defines the entire regime transition. Under Powell, every framework is reactive: cut into weakness, hike into inflation, expand the balance sheet in concert with cuts, contract in concert with hikes. Under Warsh, the framework becomes proactive and tools get split: cut rates while contracting the balance sheet, target trimmed mean rather than headline, anchor expectations through changed communication rather than dot plots. The Powell-to-Warsh handoff is not personnel. It is framework.

2. The forward curve is pricing 100 percent probability of a hold tomorrow and a pause across the year. Z6 SOFR is in the middle of its range. The market is no longer pricing cuts or hikes for the rest of this year. Z6 is sitting at the midpoint of its oscillation band. That tells you the market has fully digested the Fed’s wait-and-see posture and is now waiting for the Warsh transition to provide direction. Tomorrow’s meeting matters less for what it does and more for what it does not say. Anything Powell signals about the framework becomes the baseline Warsh either inherits or breaks.

3. Inflation swaps are rising and the Fed is pausing into that. The mechanical result is real rates falling, and that is the liquidity engine. Over the last week, one-year and two-year inflation swaps have moved up. The Fed has not moved. Real rates falling is what mechanically pushes capital out the risk curve. This is exactly the framework Warsh has been describing. The Fed does not need to cut to be stimulative. The Fed just needs to not respond to rising inflation expectations, and the gap between nominals and inflation expectations widens, and real rates compress. We are in that regime right now and the data confirms it.

4. The long end always prices the Fed’s policy error. That is the lens for reading the curve into FOMC. When the Fed makes a dovish error like 2021, the curve bear steepens because long end rates rise to price the error. When the Fed makes a hawkish error like 2018, the curve flattens and equities sell off as growth gets crushed. When the Fed pauses into a shifting regime, you get steepener twists. Right now the curve is showing modest steepening with the long end pricing in some inflation pass-through risk, but nothing that signals a major error yet. The currency and the thirty year yield are the cleanest expressions of the Fed’s net policy error, and both are still in the structural bid for risk regime.

5. The 2018 case study is the cleanest map of what a hawkish error does to equities. Inflation swaps falling plus the Fed hiking equals a 25 percent drawdown. In Q4 2018, two-year inflation swaps were falling. The Fed hiked into that. Real rates rose because nominals rose into falling inflation expectations. Equities sold off twenty five percent. That is the playbook for the bear case. The current setup is the opposite: inflation swaps are rising, the Fed is not hiking, real rates are falling, and equities are bid. Until inflation swaps roll over and the Fed gets aggressive into that, the 2018 analogue does not apply.

6. Warsh is going to diverge interest rate policy from balance sheet policy. That is a regime change most positioning has never seen. The historical pattern: cuts plus balance sheet expansion together, hikes plus contraction together. Warsh wants to break that. Cut rates to transmit to the real economy through the interest rate channel while contracting the balance sheet to offset asset price inflation. That has never been the Fed’s framework. Mapping liquidity in this new regime requires tracking quantity of money separately from the price of money, because they will move in opposite directions for the first time in the modern Fed era.

7. Bill issuance versus bond issuance is one of the most underpriced liquidity inputs in the market right now. When the Treasury issues bills, that is functionally injecting short-term money into the system. When the Treasury issues bonds, it pulls liquidity out in exchange for duration. The 2020-2021 bill-heavy issuance was a massive net liquidity impulse that nobody talks about. The 2023 Yellen pivot toward more bills and fewer bonds caused the equity bottom that fall. Warsh and Bessent will coordinate the duration mix going forward, and shifting the balance can move equity markets significantly without any rate change at all. This is the lever Trump’s team can pull without needing the Fed to act.

8. IGV vs SMH positioning divergence is still intact. Tech down 240bps on the day, IGV down 67bps. The hardware-vs-software split inside the tech complex tells you exactly where equity long-short positioning sits. With IGV holding levels while SMH gets sold harder, the long-short funds are positioned long IGV, short SMH. If FOMC produces any kind of vol event that forces unwinds, the rotation pushes IGV higher and SMH lower in a way that is mechanical, not fundamental. The setup remains the same as I have been mapping for the past two weeks. The catalyst is FOMC tomorrow plus the PCE print on Friday.

Slide Deck and Playbooks

Capital Flows Livestream 2026 04 28

14.5MB ∙ PDF file

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All educational primers on credit risk, duration risk, the yield curve regime model, and the equity risk curve are free on the Substack.

Tomorrow's Livestream: Reading the FOMC: How the Curve Reprices Powell's Last Stand

Tomorrow, I will be breaking down all of the levels, tensions, and interest rate signals to understand moving into the actual FOMC meeting.

TOMORROW’S LIVESTREAM: LINK

Paid Subscribers Report On Interest Rate Positioning and Volatility:

In the livestream today, I talk about how important it is to understand interest rates. Fundamentally, interest rates are the asymmetrical linchpin on which the entire economy turns.

Interest rates cause the rise and fall of nations because they are the direct input into the currency. All goods, services, and assets are denominated in the currency. Interest rates impact EVERYTHING. This is the book I recommend to everyone on understanding the significance of rates.

How does all of this connect to WHERE we are right now, though?

Read more

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. Credit issuance is at 3x last year’s pace and that single fact refutes every “liquidity is contracting” thesis in the market. April US junk bond issuance is nearly thirty billion dollars, more than triple last year’s total. Eleven billion in high yield notes sold in the past week alone. Intel kicked off a fourteen billion dollar bond sale to fund its Aryan Lead acquisition. Oracle wrapped sixteen billion in financing for its Michigan data center. This is not investment grade. This is high yield. When credit markets are absorbing this much issuance at this kind of pace, it is mechanically impossible for liquidity to be contracting. The bears are getting falsified by the credit markets in real time.

2. Real rates are 28 basis points from turning negative. That is the same setup that fueled the 2020-2021 melt-up. One-year real rates are at new lows. Two-year real rates are 1bp from negative. If we cross into negative territory, you get the same dynamic that produced one of the largest melt-ups in human history four years ago. The setup does not require Fed cuts to get there. It requires the Fed to keep doing what it is doing now: nothing. The Fed’s inaction is the liquidity impulse, and it is mechanical.

3. Geopolitical risk premium has been faded by the market and the over-extrapolation is unwinding. Geopolitical risk attribution to the S&P dropped from roughly forty percent at the lows to under ten percent now. The Marko Papic framework is doing exactly what it does every cycle: actual geopolitical risk events get priced into the market, the market over-extrapolates them, and three to six months later the premium gets faded. We are now in the fade phase.

4. The IGV positioning unwind is the cleanest setup for the next leg of the melt-up. IGV implied vol is at the same level it was at the prior lows, but IGV has not made a new low. That is a massive divergence. Call skew is rising in SMH. If IGV starts squeezing to the upside, equity long-short positioning has to unwind both sides of the trade, which mechanically forces buying in IGV and potentially selling in SMH. Microsoft is holding key levels and is the third largest weight in the index. If Microsoft and the broader IGV complex squeezes, the entire NASDAQ melts up further. Software is half of tech, tech is thirty five percent of the index, and the unwind has not happened yet.

5. The Russell is the cleanest range compression in the market right now and has the cleanest setup to break out. The Russell has tighter range compression than the S&P or NASDAQ. It is the structural recipient of the AI capex transfer because the Mag 7 are paying Russell-weighted companies to build the data centers. Capital is moving out the risk curve, and the Russell is where that flow has the most leverage. If we get a small pullback into FOMC, the Russell is the cleanest long expression on the bounce. If we just continue higher, the Russell breaks out of the range first and drags everything else with it.

6. The Anthropic vs OpenAI market share chart is the most underpriced data set in the market. Anthropic is now at roughly thirty percent market share, just under OpenAI. The last two software-sector selloffs in IGV were caused by Anthropic and OpenAI model releases. With Anthropic gaining share and a higher IPO probability than OpenAI, the next inflection in the IPO window directly transmits into IGV positioning. This is why I am long Oracle. Larry Ellison hits the bid, sector flows turn, and the move compounds.

7. FOMC week setup: the PCE data is the single most important release. Energy spiked in the recent CPI print. The question is whether that pass-through hits core CPI or stays contained at headline. If core stays contained, the Fed pauses cleanly and real rates keep falling. If core reaccelerates, long-end rates blow out and we get a temporary pullback before the structural bid resumes. GDP this week also matters because it confirms growth is positive and not contracting through the inflation impulse, which keeps the Fed’s pause framework intact.

8. The three ways the credit cycle ends, and why none of them are happening right now. First way: recession from AI capex disappointment, layoffs, and delinquencies. Second way: long-end rates blow out from inflation pass-through, the Fed has to hike, and we move into a real bear market. Third way: cross-border flows reverse and you get the 2025 tariff-style dollar-and-equity selloff. None of these conditions are present right now. Capex is rising, delinquencies are non-existent, the Fed is pausing into supply-side inflation rather than hiking, and cross-border flows are still pushing capital out the risk curve. Until one of these three triggers, the structural bid stays intact.

Slide Deck and Playbooks:

Slide deck from livestream:

Capital Flows Livestream 2026 04 27

5.69MB ∙ PDF file

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Additional charts I referenced:

Tomorrow’s Livestream: FOMC Setup: How Powell’s Last Meeting Reshapes the Real Rate Path

Tomorrow I map the full FOMC setup heading into Wednesday’s meeting. This is functionally Powell’s last meeting that matters before the Warsh handoff, and the way the curve is positioned for it is going to determine the next leg of the credit cycle melt-up.

See the breakdown I did of Warsh here:

TOMORROW’S LIVESTREAM: LINK

The information on this website/Substack is for information purposes only. It is believed to be reliable, but Capital Flows does not warrant its completeness or accuracy. The information on the website/Substack is not intended as an offer or solicitation for the purchase of stock or any financial instrument. The information and materials contained in these pages and the terms, conditions and descriptions that appear, are subject to change without notice. Unauthorized use of Capital Flows websites and systems including but not limited to data scraping, unauthorized entry into Capital Flows systems, misuse of passwords, or misuse of any information posted on a site is strictly prohibited. Your eligibility for particular services is subject to final determination by Capital Flows and/or its affiliates. Investment services are not bank deposits or insured by the FDIC or other entity and are subject to investment risks, including possible loss of principal amount invested. Your use of any information which is proprietary to Capital Flows or a third-party information provider shall only be used on individual devices without any right to redistribute, upload, export, copy, or otherwise transfer the information to any centralized interdepartmental or shared device, directory, database or other repository nor to otherwise make it available to any other entity/person/third party, without the prior written consent of Capital Flows.

TODAY’S LIVESTREAM RECORDING:

Today’s Livestream: Main Talking Points

1. Attribution analysis shows the rally is not short covering. Geopolitical risk dropped from 40 percent of S&P attribution to 9 percent, and that drop alone explains most of the move. When the index was at the lows, geopolitical risk was over 40 percent of the attribution weight. Today it is at 9. That collapse in geopolitical risk sensitivity is the structural driver of the melt-up, not hedge fund short covering. Short covering is the second or third order effect, not the cause. If you frame the rally as just a squeeze, you miss the underlying regime shift and you stay on the sidelines while the market keeps compounding higher. Connect the attribution to the driver, not to the surface noise.

2. 1-year real rates are 45 basis points from zero. That is the most significant chart in macro right now, period. Two-year real rates are also collapsing. Ten-year real rates are following because nominals are not keeping pace with inflation swaps. If Warsh pulls back the balance sheet and cuts rates in parallel, real rates cross into negative territory. That is the specific trigger for the next leg of the credit cycle melt-up across equities, metals, and real estate. Negative real rates mean the market pays you to take out debt on a purchasing power basis. That is the regime that fueled 2020-2021, and the setup is forming again faster than positioning is prepared for.

3. The Fed’s inaction is a liquidity impulse. Wait-and-see policy into supply-side inflation is net stimulative. The Fed is threading the needle by not hiking into the oil shock and not cutting preemptively either. That inaction, in a market where inflation swaps are still elevated, mechanically pushes real rates down. Real rates falling is liquidity expansion regardless of whether the Fed cuts the nominal rate. This is the framework that most positioning misunderstands. You do not need a cut to get a melt-up. You need the gap between nominal and inflation expectations to widen, and that is exactly what is happening.

4. The Z6/Z7 SOFR spread is the cleanest expression of the Warsh regime change pricing through the curve. Z6 is pricing zero cuts for 2026. Z7 is pricing 25bps of cuts for 2027. The spread between them is the market saying: the Fed pauses this year and cuts next year. If Warsh takes over and the framework shifts, that spread moves and both contracts reprice together. Watching Z6 in isolation misses the full picture. The spread is what actually reflects the regime change. That is where the alpha is for anyone trading rates into the Warsh transition.

5. The GS High Yield Debt Sensitivity index at new highs refutes the liquidity contraction narrative. The most-shorted index at new highs confirms capital is moving out the risk curve. If liquidity were contracting, the companies with the most leverage and highest credit risk would not be breaking out. They are. That is a definitional refutation, not an opinion. The most-shorted index hitting new highs is also part of the same transmission: capital moving out the risk curve drives squeezes in the highest short interest names because the marginal flows force it. The squeeze is a symptom of the liquidity expansion, not the cause of the rally.

6. NQ up 17 percent is not short covering. The math does not work. Mega-cap short interest has collapsed over the years because nobody shorts the index given passive flows. A 17 percent move in a mega-cap-heavy index cannot mechanically be driven by short covering. You need actual fundamental bids coming in, which is exactly what we have seen from the software inflection, the data center REIT rally, and the Russell 3000 low quality breakout. The tape is broader than just the squeeze names. The “it is just short covering” take is a cognitive cop-out used to avoid engaging with the underlying regime shift.

7. Long-end rates at ZB, UB, and ZN are the specific levels to watch for a pullback risk. But even if they break, the structural thesis holds. If long-end rates blow out and start dragging on equities, expect a pullback, but not a break below the prior structure. Credit issuance, the capex cycle, and cross-border flows are all structurally supportive. A pullback within the range is a buying opportunity, not a regime change. The only scenario that invalidates the thesis is core CPI reaccelerating meaningfully and forcing the Fed to hike, and that is not the base case for at least another month or two.

8. Monitoring the situation is a race to zero. Timeless principles are where the asymmetric edge lives. The Eric Jorgensen tweet captures the dynamic. If you are terminally online, refreshing the timeline and chasing every news headline, you will never develop an original thesis. The best trades come from foundational frameworks that do not require you to be first, because by definition nobody else is positioned for the outcome. The PURR and Oracle trades are working precisely because they are second and third order effects of the AI capex and stablecoin regime that most macro investors are not mapping. Build the framework from first principles and the pricing takes care of itself.

Slide Deck and Playbooks

This is an important time to review the video and the connected slide deck I shared yesterday about the regime change at the Fed:

I would also encourage you to check out this video on understanding how to avoid tilt in trading.

Weekly Wrap: Regime Change, Real Rates, and the Positioning Map for Next Week

Tomorrow is the weekly wrap with Jaymes Rosenthal. We walk through how the Warsh regime change, the real rate setup, the attribution framework, and the credit cycle melt-up all come together into the positioning map. What worked this week, what did not, and where the asymmetric setups are for the next leg.

TOMORROW’S LIVESTREAM: LINK

The information on this website/Substack is for information purposes only. It is believed to be reliable, but Capital Flows does not warrant its completeness or accuracy. The information on the website/Substack is not intended as an offer or solicitation for the purchase of stock or any financial instrument. The information and materials contained in these pages and the terms, conditions and descriptions that appear, are subject to change without notice. Unauthorized use of Capital Flows websites and systems including but not limited to data scraping, unauthorized entry into Capital Flows systems, misuse of passwords, or misuse of any information posted on a site is strictly prohibited. Your eligibility for particular services is subject to final determination by Capital Flows and/or its affiliates. Investment services are not bank deposits or insured by the FDIC or other entity and are subject to investment risks, including possible loss of principal amount invested. Your use of any information which is proprietary to Capital Flows or a third-party information provider shall only be used on individual devices without any right to redistribute, upload, export, copy, or otherwise transfer the information to any centralized interdepartmental or shared device, directory, database or other repository nor to otherwise make it available to any other entity/person/third party, without the prior written consent of Capital Flows.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. Inflation is the Fed’s choice. That single framing is the most important thing Warsh said. Warsh called the 2020 FAIT framework change the direct cause of the inflation surge. In August 2020, inflation was running at 1.72 percent. The Fed rewrote its framework to ask for “a little more inflation.” They got a lot more. Cumulative prices are now up 25 to 30 percent across virtually all income deciles. Warsh is not just documenting this. He is explicitly framing it as a “legacy of policy errors” from 2021 and 2022, which is a direct indictment of Powell. This framing matters because it signals Warsh is not here to fit into the institution. He is here to change it.

2. This is a regime change comparable to Volcker, Greenspan, and Bernanke, not an incremental handoff. Warsh said this is “as consequential a moment for the US economy and for the institution as any point since the late 1970s.” He is calling for a new framework, new tools, and new communication. Framework regime changes historically happen through two channels: regulatory changes that shift how capital flows through the economy, and fundamental shifts in how data is interpreted. Warsh is signaling both. The implication for rates, the dollar, and equity valuations is that the interpretive framework under which the Fed reacts to data is about to change, and the forward curve has to reprice around that.

3. The interest rate tool transmits to 340 million Americans. The balance sheet tool only helps people who already own assets. This is the single most important monetary policy distinction Warsh drew. Interest rates transmit into mortgages, auto loans, small business loans, rental markets, gig work, bonuses, hours worked, layoffs, and hiring decisions across the entire real economy. The balance sheet primarily transmits through asset prices, which means it disproportionately benefits the top 50 percent of households that own financial assets, and especially the top 1 percent. Half of Americans do not own any financial assets. Warsh is explicitly reframing the Fed’s toolkit around fairness of transmission, not just efficacy.

4. Balance sheet reduction coordinated with Treasury is coming, and it reshapes cross-asset liquidity. Warsh called the large balance sheet “fiscal policy in disguise” because the Fed now owns more outstanding debt than many parts of the financial markets. He explicitly wants to work with the Treasury Secretary to coordinate a reduction. This is the Powell-Bessent disconnect getting resolved. The key implication is that you can have rate cuts and balance sheet reduction happening in parallel, where cuts stimulate the real economy while balance sheet reduction offsets asset price inflation. That is a fundamentally new liquidity regime that most positioning is not prepared for.

5. Forward guidance is dead. Messier meetings with real dissent are coming. Warsh said the Fed compounded its 2021-2022 error because forward guidance locked them into forecasts they held longer than they should have. His preference is clean memos and messier meetings with genuine dissent. The FOMC dissent chart from 2008 through the Powell era is the cleanest visualization of the problem: Powell’s FOMC has had near zero dissent for the entire tenure. Warsh is going to change that, which means the forward curve needs to price more uncertainty into Fed meetings, which means more premium in the rates and FX markets around every meeting date.

6. New inflation data sets are coming. Trimmed mean and real-time data are going to replace Core PCE as the Fed’s lens. Warsh called current inflation data “imperfect” and explicitly proposed a billion-prices survey that captures underlying generalized inflation rather than headline noise from oil, beef, or eggs. Trimmed mean CPI is at 2.7 percent right now versus headline at 3.3 percent and core at 2.6. That gap matters because under the new framework, Warsh could justify cutting rates even with oil spiking. The supply-side shocks get trimmed out. The demand-side signal is what drives policy. This is the mechanism by which the credit cycle melt-up extends.

7. Warsh is the most AI-informed Fed chair ever, and the supply-side productivity wave reshapes the policy calculus. Warsh said “America’s economic growth potential is rising as we sit here today” and that “the supply side of the economy is drastically changing.” AI capex is now over 660 billion dollars between the major companies. If productivity rebounds the way Warsh thinks it will, disinflation or outright deflation becomes a real risk, which would force preemptive cuts. The policy framework shifts from lagging inflation to anticipating the supply-side shock. That is the setup for negative real rates in the next 12 months.

8. The dollar as linchpin. Warsh, Bessent, and Miran are coordinating a managed dollar decline to rebalance global trade. Warsh described the dollar as “the linchpin of the global economy” but also signaled that the Federal Reserve is “independent inside of government, not independent of government.” The coordinated framework with Bessent and Miran is how Trump unwinds the dollar’s overvalued position to restore US trade competitiveness without sacrificing reserve currency status. This is the FX endgame framework I laid out last week coming into direct focus. DXY going lower, metals bidding, and cross-border flows feeding the credit cycle melt-up.

9. No CBDC, but digital assets are “part of the fabric.” Stablecoins are the winner of this framework. Warsh was explicit that the Fed has no legal authority for a central bank digital currency and that it would be bad policy. At the same time, he acknowledged digital assets are already part of the US financial system. The asymmetry is obvious: stablecoin supply keeps growing, every major stablecoin is dollar-denominated, and the dollar’s reserve currency status gets amplified through stablecoins globally. That is directly bullish for the PURR and Hyperliquid thesis. The Fed is not going to compete with private digital assets. It is going to let them extend the dollar’s reach.

Slide Deck and Playbooks

The largest bets I am taking in ORCL and PURR continue to pay. These are moving in lockstep with the thesis I laid out and the progression of the credit cycle:

The regime change at the Fed will directly play into these dynamics, and you can find the slide deck from today’s livestream here:

Capital Flows Livestream 2026 04 21

26.2MB ∙ PDF file

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Tomorrow's Livestream: Labor, Growth, and Inflation: How Interest Rates Drive The Credit Cycle

Tomorrow I map the three variables that actually determine where interest rates go from here: the labor market, growth from the AI capex wave, and inflation. All three are moving in ways the Fed’s current framework does not capture, and the Warsh regime change makes the mismatch even larger. I break down how these three feed into each other, how that transmission reshapes global macro liquidity, and what it means for the next leg of the credit cycle melt-up across rates, the dollar, and equity positioning.

TOMORROW’S LIVESTREAM: LINK

The information on this website/Substack is for information purposes only. It is believed to be reliable, but Capital Flows does not warrant its completeness or accuracy. The information on the website/Substack is not intended as an offer or solicitation for the purchase of stock or any financial instrument. The information and materials contained in these pages and the terms, conditions and descriptions that appear, are subject to change without notice. Unauthorized use of Capital Flows websites and systems including but not limited to data scraping, unauthorized entry into Capital Flows systems, misuse of passwords, or misuse of any information posted on a site is strictly prohibited. Your eligibility for particular services is subject to final determination by Capital Flows and/or its affiliates. Investment services are not bank deposits or insured by the FDIC or other entity and are subject to investment risks, including possible loss of principal amount invested. Your use of any information which is proprietary to Capital Flows or a third-party information provider shall only be used on individual devices without any right to redistribute, upload, export, copy, or otherwise transfer the information to any centralized interdepartmental or shared device, directory, database or other repository nor to otherwise make it available to any other entity/person/third party, without the prior written consent of Capital Flows.

LIVESTREAM RECORDING FROM TODAY:

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Today’s Livestream: Main Talking Points

1. Everyone calling for another 2008 in real estate has been falsified by the data, not my opinion. If you were bearish in 2020 or 2021 and did not buy a house, you are now structurally worse off. Home prices are higher, mortgage rates are higher, and the people who locked in sub-4 percent mortgages at low cost basis have no incentive to sell. That is not a collapsing market. That is the most resilient housing structure we have seen in modern history, and it has been resilient through one of the fastest rate-hiking cycles ever recorded. Connect your view to the data or abandon the view.

2. The mortgage payment math is what actually drives real estate, and it is locked in for the majority of homeowners. Median home price mortgage payments went from roughly 1,000 dollars in the 2015-2020 window to materially higher as the interest rate component spiked. The people who bought during the 2020-2021 window have that lower payment locked in for 30 years. Those homeowners do not sell unless the labor market cracks, which is the single variable that would change the entire thesis. We are not seeing that crack.

3. Mortgage delinquencies are not increasing. The narrative that defaults are exploding is anecdotal, not broad-based. Delinquencies only ticked up marginally through the 2022-2023 rate cycle. That is a fundamentally different setup from 2008, where delinquencies were already spiking before prices cracked. If you want a 2008-style unwind, you need delinquencies rising, supply flooding the market, and forced selling. We have none of those conditions right now. Pulling anecdotal evidence from one neighborhood and extrapolating to the national market is how bears have been getting cooked for five years.

4. Supply came online in 2023 and 2024 and got absorbed without breaking prices. That is the cleanest demand signal in the market. Building permits and housing starts spiked in 2021 and 2022. Those completions hit the market in 2023 and 2024. Under any bearish framework, that supply wave should have crushed prices. It did not. Prices consolidated slightly and held. That tells you demand is structurally stronger than every bearish narrative on Twitter. More supply is coming, but mortgage rates have come down enough to keep the supply-demand balance roughly stable.

5. The mortgage rate to Treasury spread is compressing, and that is a stimulative signal for real estate. The 30-year mortgage rate is at 6.39 percent, the 30-year Treasury is at 4.88 percent, and the spread between them is the credit risk premium for mortgages. When that spread widens, real estate gets squeezed. When it compresses, real estate gets support. The spread has been dropping, which is one of the structural reasons real estate has stayed bid even at elevated nominal rates.

6. Real purchasing power is now the dominant framework for real estate, not nominal rates alone. Mortgage rates relative to inflation swaps matter more than the headline mortgage rate. If nominal rates stay flat but incomes rise with inflation, people can afford houses again even without rates falling. That is the exact setup that is developing now. As real interest rates fall and incomes catch up, the real cost of carrying a mortgage drops even if the nominal payment does not. This is how the credit cycle transmits into real estate even without the Fed cutting.

7. XLRE and ITB are diverging for a structural reason: commercial real estate rolled over at higher rates, residential locked in lower ones. Commercial real estate typically has 5-year debt terms. REITs levered up in 2020 and 2021 at low rates. Those debts rolled over in 2023, 2024, and 2025 at much higher levels, which is why XLRE has not made new all-time highs. ITB, on the other hand, made a new all-time high in 2023 at elevated rates because the 30-year fixed mortgage structure means homeowners do not sell. The balance sheet duration difference is what explains the divergence, and it is also why XLRE is set up for the next leg higher as real rates fall.

8. 2-year real rates are 78 basis points from turning negative. That is the specific trigger for the second leg of the real estate melt-up. If real rates cross into negative territory, people get paid to take out debt on a real purchasing power basis. That is the environment that fueled the 2020-2021 real estate boom. If we get there again in the next 12 months, which is possible given the Fed’s current stance and where Warsh is likely to take policy, you will see capital flow into home builders, REITs, and commercial real estate in a way that most positioning is not prepared for. EQIX has already led. CoStar is on the disrupted side. The rest of the sector is setting up for a fundamental attribution split that the paid report breaks down in detail.

I would also encourage you to watch my friend most recent video on the importance of understanding trading and risk management with how the world is changing right now.

Slide Deck and Playbooks

Slide deck from livestream:

Capital Flows Livestream 2026 04 21

2.09MB ∙ PDF file

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The four reports that frame where we are in the credit cycle and the bets I am taking within it:

All of the credit cycle research:

• Credit Cycle Playbook: Stagflation vs Melt Up

• The Melt-Up Trigger: The Playbook For The Credit Cycle Melt Up

• My Largest Bets in the Credit Cycle Melt-Up

• Cross-Border Flows, the Dollar Devaluation, and the Global Trade Rebalancing

• See the paid subscriber positioning report section here for detailed market views for this week: LINK

Tomorrow’s Capital Flows Livestream: Decoding the Warsh Testimony: What the Next Fed Chair Actually Said

Kevin Warsh testified before the Senate Banking Committee today. He laid out an explicit reform agenda that includes a new inflation framework, a smaller balance sheet, the end of forward guidance, and a fundamental rethink of how the Fed measures inflation and sets policy in an AI-driven supply-side regime. Tomorrow I go line by line through his most important statements, connect each one to the macro charts that make the transmission mechanism tangible, and map what a Warsh-led Fed actually means for rates, the dollar, the balance sheet, and the credit cycle melt-up. If you want to understand what the next two years of monetary policy are going to look like, you cannot miss this stream.

TOMORROW’S LIVESTREAM: LINK

Paid Subscriber Report On In-Depth Real Estate Sector Analysis and My Personal Thoughts On The Changes In Real Estate:

A 56-page deep dive on every stock in the S&P 500 Real Estate sector, with a 3-factor attribution engine breaking each name’s return into market, sector, and idiosyncratic components so you can see exactly where the dispersion is coming from. Every constituent gets a full-page profile with rolling attribution, rolling betas, and a specific “what you’re actually trading” read — plus a position-sizing framework that maps every name to the macro book actually driving it. Use it to tilt your exposure inside the sector rather than settling for a passive weighted average of fundamental winners and fundamental losers.

Read more

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. We are at all-time highs in human history for equity valuations, not just prices. That distinction determines everything. The S&P price-to-sales deviation bands show we are above the 2021 peak on valuation multiples (all charts in the slide deck below). The 2022 bear market was a valuation re-rating driven by inflation and Fed hiking, not a recession or earnings contraction. Post-2022 we have had both earnings expansion and valuation expansion stacking on top of each other. This is the setup where liquidity becomes the single most important variable to track, because valuation multiples at these levels are hyper-sensitive to any shift in the liquidity regime. The valuation level is not the sell signal. A change in liquidity is the sell signal.

2. The Goldman Sachs High Yield Debt Sensitivity Index just made new highs. That is the cleanest refutation of the “liquidity is contracting” narrative in the market. By definition, the companies with the most leverage and the highest sensitivity to high yield debt cannot be making new highs while liquidity is contracting. That is not a matter of interpretation. It is a matter of definition. Every take circulating on Twitter right now that says liquidity is contracting has been falsified by that single chart. Connect your view to price action or admit the view is wrong.

3. The Fed is pricing a full pause across April, June, July, and into September. The Z6 contract is at nine basis points of cuts for the year. That is functionally a hold. We went from 75bps of cuts priced, to 50, to 25, then into the capitulation where the market briefly priced hikes. Now we are back to 9bps of cuts, oscillating between a pause and 25bps. The Fed is threading the needle on supply-side inflation rather than hiking into it, which is exactly what allows capital to continue moving out the risk curve. How Warsh plays it when he comes in will determine whether this oscillates higher or lower from here.

4. The capex rotation has moved past Nvidia into second and third order beneficiaries. EQIX just ripped to new highs with barely a pullback. Nvidia has been lagging because the market already priced that leg. Capital is now moving into data center REITs, electrical equipment, utilities connected to the AI build-out, and the companies in the Russell that actually receive the capex transfer. The Russell is outperforming for a structural reason: the Mag 7 companies are spending nearly a trillion dollars of capex and they are not building data centers themselves. They are paying Russell-weighted companies to build them. That capital transfer is why the low-quality Russell 3000 stocks are bid, not short-squeeze mechanics alone.

5. The most-shorted index is on the verge of breaking out to new highs and setting up a 2021-style positioning unwind. The GS Most Shorted rolling index is printing higher highs. AMC has bid from the lows. GameStop has ticked up. I would not be surprised to see GameStop trade up to 30-35 dollars. This is not the 2021 cycle repeating with the same names. It is the same positioning mechanic playing out in the specific stocks that have been shorted into the current cycle, which means the Russell names with the highest short interest across consumer discretionary, communications, financials, technology, utilities, and industrials.

6. Cross-border flows are still the dominant liquidity channel. The G10 carry trade index just made another high. The global carry trade rising is capital moving out the risk curve on an international basis. Investors are borrowing in low-rate currencies, converting, and bidding risk assets. That is the structural force funding the melt-up beyond what US domestic liquidity alone could produce. This is why the DXY continues to bleed against EUR, GBP, AUD, and the peso. The EUR setup at these levels is one of the cleanest long entries I have flagged this cycle. Same with the pound, the Aussie, and the peso. EWW and EWZ still look like great opportunities on the equity side of that flow.

7. Gold and silver detached from real rates because global trade rebalancing took over as the dominant driver. In the prior regime, gold moved in lockstep with real interest rates. That relationship broke this cycle. The reason is that global trade rebalancing and FX flows are now structurally larger inputs to gold and silver than real rates alone. Gold did not bid on geopolitical risk during the Iran/Strait of Hormuz shock, which told me it had flipped its primary sensitivity to equity beta and the credit cycle. When the dollar topped and the capitulation finished, gold and silver bottomed exactly where the dollar rolled over. The setup from here is clean: DXY making new lows into Warsh, metal beta continuing to bid, and the entire metals complex melting up with equities rather than against them.

8. The Nikkei is in the same melt-up scenario as the US, and the DAX is the next setup to watch. The BOJ is allowing real rates to be negative and the Ministry of Finance is spending into one of the hottest economies Japan has ever had. Those factors alone are enough to keep the Nikkei in melt-up mode. The DAX and Euro Stocks have not made new all-time highs yet, but vol has crushed and call skew is rising. If any geopolitical risk gets expressed overnight in European indices, I am a buyer of any dip there. Same logic applies to the Nikkei on any consolidation.

Slide Deck and Playbooks

Slide deck from today:

Capital Flows Livestream 2026 04 20

30.4MB ∙ PDF file

Download

Download

All of the credit cycle research:

• Credit Cycle Playbook: Stagflation vs Melt Up

• The Melt-Up Trigger: The Playbook For The Credit Cycle Melt Up

• My Largest Bets in the Credit Cycle Melt-Up

• Cross-Border Flows, the Dollar Devaluation, and the Global Trade Rebalancing

All educational primers on credit risk, duration risk, the yield curve regime model, and the equity risk curve are free here:

Real Estate, Mortgage Rates, and the Second Leg of the Credit Cycle

Tomorrow I map real estate in the full macro context. Why XLRE making new highs is refuting every 2008 comparison circulating right now, how the ITB and XLRE divergence tells you where capital is actually flowing, and how the real estate setup connects to the broader credit cycle melt-up through mortgage rate dynamics and household balance sheets.

TOMORROW’S LIVESTREAM: LINK

For Paid Subscribers: Tonight’s Positioning Report

Read more

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. Stocks are melting up, bonds are lagging, and the dollar is bleeding against the full basket. That is the exact combination I said you wanted to be positioned for. ES and Russell are both bid with Russell outperforming, bonds are sitting in their range with the curve steepening marginally as long bonds lag, and the dollar is getting sold against AUDUSD, AUDJPY, and the peso. I was explicit with paid subscribers that the trade expression was long stocks and short the dollar, not playing the bond side (LINK). That is exactly what has worked. When the forward curve repriced from 25bps of hikes at the capitulation back to 12bps of cuts for this year, that was the shift that unlocked this leg.

2. Crude positioning got flushed today and vol cracked. The call skew that blew out twice is now getting unwound in full. Going into the Iran/Strait of Hormuz news, crude call skew blew out aggressively. When crude had its first flush, traders doubled down and spiked call skew a second time. I flagged on stream that week that everyone just got levered long calls again at a lower high in vol, and that the position was going to flush. That is exactly what is happening today. Crude is off hard, OVX is cracking, and the geopolitical risk premium that was priced into equities is coming out.

3. Short-end real rates are 55 basis points from going negative. That is the specific signal everyone should be tracking. The Fed has let one-year and two-year real rates collapse this entire move because they are pausing into supply-side inflation. If short-end real rates actually cross into negative territory, you get a 2021-style melt-up that most people cannot even conceive of right now. If the Fed moderates and holds the line, the melt-up is still real but more measured. The exact magnitude depends on how far the Fed lets real rates fall. That is the signal to watch, not a price level.

4. Ten-year real rates are steepening versus two-year real rates, and that is a growth signal, not a warning. Two-year real rates have collapsed. Ten-year real rates have held or risen marginally. The real rate curve steepening tells you that growth is not collapsing through this inflationary impulse. If growth were actually deteriorating, long-end real rates would be falling faster than the short end. That divergence is why equities have the runway for at least another month of melt-up, and why the Russell is outperforming as cyclical conditions hold up.

5. Inflation swaps are pricing this shock as short-term and supply-driven, not as a structural repricing. One-year and two-year inflation swaps have risen. Ten-year and thirty-year inflation swaps have actually come down. That decomposition tells you the market is correctly pricing this as an oil-driven supply shock rather than a demand-driven inflation regime change. The Fed does not control the supply side, so they are letting it pass through rather than hiking. That is the optimal setup for liquidity to keep moving out the risk curve.

6. Tech is 35 percent of the S&P 500 and software is roughly half of tech. The software inflection is the mechanical driver of the next leg. Over the last month, tech has contributed almost five percent of the index return on a weighted basis. If software continues to bid from here, you could have another month where the S&P adds another ten percent and tech contributes six or seven points of that alone. That is not a stretch scenario. Software was the most under-owned subsector in the market for six months. Yesterday’s IGV rally into the Opus 4.7 release confirmed the positioning inflection. The mechanical path from here is passive flows rebalancing back toward neutral weights, which closes the air pocket under software fast.

7. The Russell is outperforming because it is the index that actually receives the capex spend. The Mag 7 companies are spending nearly a trillion dollars in capex. They are not building data centers themselves. They are paying companies in the Russell to build them. So the Russell is the balance sheet that absorbs the capex transfer, which is why it held the triple low during the geopolitical shock and why it is now leading on the upside. Once liquidity comes back in and geopolitical risk drops, the Russell has the cleanest setup because the capex transmission is still in its early innings.

8. Gold and silver are inflecting. The metals beta is about to have a significant melt-up. I called the low in gold and silver earlier this week almost exactly. The thesis is that metals are fading the geopolitical risk premium and switching their primary sensitivity back to the credit cycle. People ask how metals can rally when crude is falling and geopolitical risk is dropping. The answer is you have to net out the drivers. Credit cycle liquidity is a structurally larger driver for metals than the geopolitical risk premium. As cross-asset vol compresses and real rates fall, metals bid. That is the setup heading into Warsh coming into the Fed and the DXY making new lows later this year.

Credit Cycle Playbooks

• Credit Cycle Playbook: Stagflation vs Melt Up

• The Melt-Up Trigger: The Playbook For The Credit Cycle Melt Up

• My Largest Bets in the Credit Cycle Melt-Up

• Cross-Border Flows, the Dollar Devaluation, and the Global Trade Rebalancing

All educational primers on credit risk, duration risk, the yield curve regime model, and the equity risk curve are free here:

Next Week: Capital Flows | Pair Trades and Derivative Expressions for the Next Leg

Next week, I will map the specific pair trade constructions and derivative expressions that have the best risk-reward as this leg of the melt-up extends. How to size long dollar-short positions against the specific G10 crosses that are benefiting most from real rate differentials. Where to express the software inflection through names that are still lagging IGV. And the specific out-of-the-money call structures on the high short interest quintile names that offer the asymmetry I want into what could be the largest IPO window in financial history.

MONDAY’S LIVESTREAM: LINK

The information on this website/Substack is for information purposes only. It is believed to be reliable, but Capital Flows does not warrant its completeness or accuracy. The information on the website/Substack is not intended as an offer or solicitation for the purchase of stock or any financial instrument. The information and materials contained in these pages and the terms, conditions and descriptions that appear, are subject to change without notice. Unauthorized use of Capital Flows websites and systems including but not limited to data scraping, unauthorized entry into Capital Flows systems, misuse of passwords, or misuse of any information posted on a site is strictly prohibited. Your eligibility for particular services is subject to final determination by Capital Flows and/or its affiliates. Investment services are not bank deposits or insured by the FDIC or other entity and are subject to investment risks, including possible loss of principal amount invested. Your use of any information which is proprietary to Capital Flows or a third-party information provider shall only be used on individual devices without any right to redistribute, upload, export, copy, or otherwise transfer the information to any centralized interdepartmental or shared device, directory, database or other repository nor to otherwise make it available to any other entity/person/third party, without the prior written consent of Capital Flows.

Today I walked through the full cross-border flows framework. How the current account and the capital account always net to zero, why that accounting identity is what actually drives FX, and why the people Trump has put around monetary and fiscal policy are the only ones in Washington who understand this structure. On the tape, Opus 4.7 dropped this morning and IGV bid into it. That is the exact positioning signal I have been telling paid subscribers to watch for (link). Tomorrow I dig into the specific positioning unwinds across cross-asset skew and where I think the next leg of the melt-up compounds.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. Opus 4.7 dropped this morning and IGV rallied on the news. That is a regime shift. For the last six months, every Anthropic and OpenAI product release has caused selling pressure in software. Today the biggest model drop of the year hit the tape and IGV is up. When a new model launches and the sector that has been getting sold refuses to make new lows, you are watching positioning reject the bear case in real time. I have been telling paid subscribers this is exactly the tell to wait for. It overlapped with another five percent day in Oracle, which is the direct expression of the same rotation.

2. The current account and the capital account always net to zero. That is not a theory. It is an accounting identity. If the US imports more than it exports, some other country is exporting more than they import. The dollars the US sends abroad must come back, and the only place they come back to is US financial assets. That is why foreign capital bids treasuries, equities, real estate, and private equity AUM regardless of the domestic growth story. If you do not understand that mechanism, you cannot explain why US valuations have been structurally elevated since 2009 while every reductionistic liquidity framework has failed.

3. A trade surplus is not a sign of competitiveness. It is the mirror image of excess domestic savings flowing abroad as capital exports. When a country produces more than it consumes, the excess output leaves as exports and the excess savings leave as capital. These are the same event viewed from two sides of the balance sheet. This is why Michael Pettis has been right for a decade on why the savings glut continues funding US asset markets, and why the dollar’s reserve currency status is simultaneously a privilege and a burden.

4. The dollar’s reserve currency status has a privilege side and a burden side. The privilege is that Treasury can issue cheaply, real yields stay lower than they should, and Wall Street dominates global finance. The burden is that the dollar stays structurally strong, which kills trade competitiveness and slowly erodes the manufacturing base. Wages stagnate because workers compete in a global market, households have to borrow to maintain living standards, and you get persistent inequality in the income distribution that feeds back into more household debt and more asset price inflation. That feedback loop is why home prices and equity valuations are at all-time highs simultaneously.

5. China has run a closed capital account through their real estate unwind, and the divergence in their economic structure is now driving global trade flows. China’s property sector has gone through a 2008-style unwind over the last two years. You can see it in the Bloomberg chart: real estate collapsing while the Goldman Sachs infrastructure build-out index rips to new highs. China’s response has been to export more aggressively to the rest of the world to prop up their domestic system, which is why rare earth, manufacturing capacity, AI infrastructure, and the space race capex have all inflected higher. The closed capital account is why you have not seen capital flight despite the real estate crisis.

6. The Eurozone is structurally short crude, which is why EUR rate pricing stays hawkish relative to the US. Germany exports more than it imports. The Eurozone as a whole does not produce its own oil. When crude rallies, the Eurozone faces a stagflation setup that the US does not face to the same degree, because 70 percent of US GDP is household consumption while the Eurozone is more corporate and export-weighted. That is why the forward curve in the Eurozone is pricing roughly 47 basis points of hikes into year-end while the US is pricing a functional pause. Real rate differentials and monetary policy divergence are now driving EURUSD, not inflation differentials. That shift is the cleanest signal that central banks have moved to the background and cross-border flows have taken over as the primary driver.

7. Cross-border flows are now the dominant liquidity channel, not central bank balance sheets. For the last five years everyone has been focused on Fed balance sheet expansion and contraction. Central banks have largely paused. The marginal mover is now the savings glut recycling through FX and capital flows. That is why you are seeing EURUSD rally with equities while bonds sit in a range. Equities and FX have decoupled from bonds and crude. Once you understand that cross-border flows are the variable, you stop waiting for the Fed to do something and start tracking real rate differentials, FX positioning unwinds, and savings repatriation.

8. Bessent, Warsh, and Miran are in place because they understand this structure and Trump wants it unwound. Druckenmiller’s commendation of Warsh years ago was specifically that he understood global capital flows better than anyone he had ever worked with. Bessent built his career trading these imbalances. Miran wrote the playbook. Tariffs were never the endgame. The endgame is shifting pressure on China, which had been rerouting exports through Vietnam, Mexico, Thailand, and India to get around direct tariffs. If the administration can actually cut a deal that forces China to boost domestic consumption and stop dumping excess savings into US asset markets, it will be the most consequential structural shift in global trade in 40 years. That is the FX endgame everyone is missing.

Slide Deck, Credit Cycle Playbooks, Educational Primers:

Below are the 3 reports/videos I have done on the current credit cycle and the bets I am taking in it. If you are trying to understand WHERE we are and WHAT to look for, go through these.

• Credit Cycle Playbook: Stagflation vs Melt Up

• The Melt-Up Trigger: The Playbook For The Credit Cycle Melt Up

• My Largest Bets in the Credit Cycle Melt-Up

Here is the slide deck from today’s livestream:

Capital Flows Livestream 2026 04 15

3.67MB ∙ PDF file

Download

Download

Tomorrow: Capital Flows | Positioning Unwinds and the Next Leg of the Melt-Up

Tomorrow I map where the specific positioning unwinds are setting up across cross-asset skew. Where EURUSD skew finished unwinding and what that means for the next leg. How the G10 carry trade index making new highs connects to where global equity sectors bid next.

TOMORROW’S LIVESTREAM: LINK

See the paid subscribers section at the end of this report for the views and drivers I explained: LINK

I will expand more on this in the next positioning report exclusively for paid subscribers.

The information on this website/Substack is for information purposes only. It is believed to be reliable, but Capital Flows does not warrant its completeness or accuracy. The information on the website/Substack is not intended as an offer or solicitation for the purchase of stock or any financial instrument. The information and materials contained in these pages and the terms, conditions and descriptions that appear, are subject to change without notice. Unauthorized use of Capital Flows websites and systems including but not limited to data scraping, unauthorized entry into Capital Flows systems, misuse of passwords, or misuse of any information posted on a site is strictly prohibited. Your eligibility for particular services is subject to final determination by Capital Flows and/or its affiliates. Investment services are not bank deposits or insured by the FDIC or other entity and are subject to investment risks, including possible loss of principal amount invested. Your use of any information which is proprietary to Capital Flows or a third-party information provider shall only be used on individual devices without any right to redistribute, upload, export, copy, or otherwise transfer the information to any centralized interdepartmental or shared device, directory, database or other repository nor to otherwise make it available to any other entity/person/third party, without the prior written consent of Capital Flows.

Most of the narratives about macro liquidity, dollar devaluation, and credit cycles circulating right now are disconnected from price. Today I went back to first principles. What is money? How does credit creation actually work? What are the two fundamental risks that price every asset in existence? And how do you connect all of that to what is actually happening in markets right now rather than just describing an abstract concept? Below are the main talking points. Tomorrow I go deeper into cross-border flows, trade imbalances, and how surplus and deficit countries drive FX.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. Every financial asset is simultaneously someone else’s liability. Your bank deposit is the bank’s debt. Your treasury bond is the government’s debt. Your mortgage is an asset to the bank. This is not a philosophical point. It means that money never functions in a vacuum and that every macro shift creates winners and losers on both sides of these relationships simultaneously. If you bought a house in 2020 at a locked-in low rate, you are winning as inflation rose. The bank that issued that mortgage at 3% into a 5% rate environment is losing in real terms. That asset liability mismatch is how financial crises actually happen.

2. Most money in the modern economy is credit, not central bank printing. When a bank makes a loan, it creates an asset and a new liability simultaneously. No physical money is printed. Purchasing power is created through an accounting entry. This is why the Fed expanded its balance sheet through the entire 2010s and inflation barely moved. The people saying quantitative easing always causes inflation could not explain that. If you cannot explain that divergence, your liquidity framework is incomplete.

3. Every asset in existence is priced by exactly two risks: duration risk and credit risk. Duration risk is the uncertainty of real purchasing power over time, driven by inflation. Credit risk is the uncertainty of nominal repayment, driven by growth. Long bonds and growth stocks get crushed when inflation rises because of duration risk. High yield spreads blow out in recessions because of credit risk. Everything else is a derivative of these two. Once you understand that, the stock-bond correlation tells you in real time whether markets are pricing a duration shock or a credit shock on any given day.

4. The 2022 bear market was a duration risk event, not a credit risk event. Stocks and bonds sold off together because the primary driver was inflation repricing the value of future cash flows. Credit spreads widened but not catastrophically. The labor market held. That is not what a credit cycle contraction looks like. Understanding that distinction would have kept you on the right side of the trade all year and prevented you from being positioned for a recession that never arrived.

5. Crises do not erupt from high debt levels. They erupt from asset liability mismatches. Every chart on Twitter showing debt-to-GDP at all-time highs is not telling you a recession is coming. It is describing a stock. What matters is the mismatch -- when short-dated liabilities are funding long-term assets and the rollover conditions change. The duration of high yield debt has been collapsing for five years. Banks are giving shorter terms on high yield credit, which means less duration risk in the high yield market but more refinancing risk. That dynamic is why the high yield ETF moves with equities, not with TLT.

6. The equity risk curve is the most direct read on whether liquidity is expanding or contracting. The Goldman Sachs high yield debt sensitivity index, which captures the stocks with the most leverage, has been making multiple all-time highs. Capital is moving out the risk curve into the highest risk, highest leverage names. That is not what a liquidity contraction looks like. If someone is telling you liquidity is contracting while that index is at all-time highs, their framework has been falsified by price. Connect your view to price or admit the view is wrong.

7. The yield curve encodes the current macro regime in real time. Bull steepening signals crisis or aggressive easing. Bear flattening signals late-stage tightening. Bear steepening signals inflation fears. Bull flattening signals a growth scare. We had the curve invert on inflation risk in 2022, not recession risk. We un-inverted into bear steepening because growth and inflation were accelerating, not because a recession was imminent. Everyone who said the un-inversion signals recession lost money. The model is free on the Substack. There is no excuse for not having it.

8. Tomorrow: how surplus and deficit countries drive FX, carry trades, and cross-border flows. The US is a trade deficit country. China is a surplus country actively suppressing its currency to carve out global manufacturing. Every other major economy is choosing between defending trade competitiveness and fighting inflation. That contest is playing out in FX right now and it connects directly to how capital flows across borders, what the dollar does next, and why the people Trump has put in place -- Bessent, Warsh, Miran -- all specialize in exactly this. That is tomorrow’s stream.

Slide Deck, Credit Cycle Playbooks, Educational Primers:

Below are the 3 reports/videos I have done on the current credit cycle and the bets I am taking in it. If you are trying to understand WHERE we are and WHAT to look for, go through these.

• Credit Cycle Playbook: Stagflation vs Melt Up

• The Melt-Up Trigger: The Playbook For The Credit Cycle Melt Up

• My Largest Bets in the Credit Cycle Melt-Up

Here is the slide deck from today’s livestream:

Capital Flows Livestream 2026 04 15

2.67MB ∙ PDF file

Download

Download

Here are the two educational primers I wrote on the credit cycle and money:

Beyond The Credit Cycle A Path Dependent Asset Liability Macro Primer (1) (5) (8)

240KB ∙ PDF file

Download

Download

The Macroeconomic Framework Of Capital Flows A Comprehensive Playbook (2) (5) (11)

633KB ∙ PDF file

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Download

All of the educational primers are here for free:

Tomorrow: Capital Flows | Agentic Macro Trading | Surplus Countries, Deficit Countries, and the FX Endgame

Tomorrow, I am mapping the full cross-border flows framework. How trade imbalances between surplus and deficit countries create the savings glut that funds US asset markets. How China weaponizes its currency. Why the dollar falling against the yuan right now is not a liquidity story -- it is a deliberate trade rebalancing play. And how all of that connects to carry trades, FX positioning, and the next leg in equities.

TOMORROW’S LIVESTREAM: LINK

For Paid Subscribers: Macro Flows and Positioning Analysis

Read more

The macro regime is confirming everything I have been mapping. Real rates falling. Russell outperforming. Oracle up double digits. Software catching a bid. Today I zoomed out and walked through how I actually express the macro regime in trades -- not through a diversified portfolio, but through a small number of concentrated bets with the highest sensitivity to what is actually happening in the credit cycle. The two largest positions I am running right now are PURR and Oracle. Below, I walk through why each one is the best expression of the macro setup we are in.

Today’s Livestream: Main Talking Points

1. Seventy to eighty percent of all market returns are driven by macro. This is the foundational reason why mapping the macro regime comes before any individual position. Even the best fundamental thesis gets cooked if you are on the wrong side of the macro cycle. That is why everything starts with the GIP framework, real rates, and the credit cycle. Get macro right first. Then find the concentrated bets within it.

2. Diversification is the enemy of exceptional performance. If you keep adding positions, you eventually own the index with more friction. Exceptional returns require concentrated bets with genuine conviction. The entire financial industry has been structured to prevent people from doing that. Most managers own fifty to a hundred names and then wonder why they can’t beat the index. The math does not work. You need a few high-quality bets where you have real edge.

3. PURR is the highest-sensitivity vehicle to the most disruptive change in the financial system. Hyperliquid has built the one-stop shop for perpetual liquidity with no VC funding, eleven employees, and $900 million in revenue. More than half of the volume running through Hyperliquid is now in traditional financial products -- gold, silver, equities, nat gas -- not crypto. That number keeps rising. Institutions cannot own the Hyperliquid token in the current US regulatory framework. PURR is the only institutional-grade vehicle to front-run that regulatory unlock. When Hyperliquid gets added to the US financial system, the institutions that have been locked out will need to buy something. PURR is that something.

4. PURR’s execution differentiates it from every other digital asset treasury. Every other treasury company issues stock to buy more of the underlying asset, destroying shareholder value for current holders. PURR buys back stock when trading at a discount to MNAV and issues shares when at a premium. That mechanic creates compounding shareholder value instead of just chasing token accumulation. PURR has been outperforming the Hyperliquid token itself since the merger. That outperformance is confirmation that the execution is working. If a DAT is underperforming the underlying asset, there is no reason to own it over the spot token. PURR is doing the opposite.

5. The PURR thesis stacks three sources of asymmetry simultaneously. First, macro liquidity expanding as real rates fall pushes capital out the risk curve toward exactly this type of asset. Second, Hyperliquid regulatory integration in the US is a binary event that is not priceable in advance by the institutions that will need to buy. Third, a leveraged PURR balance sheet, once the company activates their credit facility, multiplies the underlying Hyperliquid exposure without diluting shares. All three of those are independent asymmetries pointing in the same direction.

6. Oracle is the single most mispriced AI sensitivity company in the world. They have done something no other company has done. They leveraged the entire balance sheet, issued stock, slashed free cash flow, and poured everything into AI infrastructure CapEx at a moment when consensus was punishing companies for spending. Free cash flow went negative for the first time in over a decade. The stock drew down more than fifty percent. Every possible source of selling -- fundamental, sector, market, geopolitical -- hit simultaneously at these lows. And none of it changed the backlog, the data center build-out, or the fact that Larry Ellison owns forty percent of the company with his entire net worth tied to the outcome.

7. Larry Ellison has structured Oracle like a call option on the AI infrastructure cycle. He pulled all the negative returns into the present and pushed the positive returns into the future. That is not an accident. That is a deliberate compression of the risk-reward profile. My view is that he wants the stock at eight hundred dollars and he is structuring the company accordingly. When the Texas data center build-out begins generating cash flow this year, the free cash flow picture reverses. When it reverses, he starts buying back stock again. That is how he gets there.

8. The attribution model confirms the setup is changing. The indicator I have built decomposes Oracle’s daily returns into market beta, sector flows, subsector flows, and fundamentals. At the lows, every single factor was negative simultaneously -- fundamentals, tech sector, IGV subsector, and the broad market from the geopolitical shock. That was the maximum compression point. Right now, on a day where Oracle is up double digits, fundamentals are contributing positively for the first time in months. That is the marginal change I have been waiting for. When that persists and accelerates, the thesis is in full execution.

All of the reports and models that I referenced in the livestream:

• The AI Reflexivity Loop (this moment will define you)

• This is my next big bet (Oracle Risk reward)

  • Oracle Model: LINK

• AI Playbook, Larry Ellison’s Big Bet With ORCL, and New Stock Models

• Hyperliquid Strategies (PURR) Report and Models

  • PURR fair value model: LINK

Tomorrow: Capital Flows | Cross-Border Flows, the Dollar Devaluation, and the Global Trade Rebalancing

Tomorrow, I am going deeper into something most people are completely missing in the dollar narrative. The dollar falling against the yuan is not a liquidity contraction story. It is a deliberate trade rebalancing play that connects Trump, Scott Bessent, Kevin Warsh, and the entire US policy apparatus. Understanding how cross-border flows and currency policy interact is one of the most important things you can know right now.

TOMORROW’S LIVESTREAM: LINK

The information on this website/Substack is for information purposes only. It is believed to be reliable, but Capital Flows does not warrant its completeness or accuracy. The information on the website/Substack is not intended as an offer or solicitation for the purchase of stock or any financial instrument. The information and materials contained in these pages and the terms, conditions and descriptions that appear, are subject to change without notice. Unauthorized use of Capital Flows websites and systems including but not limited to data scraping, unauthorized entry into Capital Flows systems, misuse of passwords, or misuse of any information posted on a site is strictly prohibited. Your eligibility for particular services is subject to final determination by Capital Flows and/or its affiliates. Investment services are not bank deposits or insured by the FDIC or other entity and are subject to investment risks, including possible loss of principal amount invested. Your use of any information which is proprietary to Capital Flows or a third-party information provider shall only be used on individual devices without any right to redistribute, upload, export, copy, or otherwise transfer the information to any centralized interdepartmental or shared device, directory, database or other repository nor to otherwise make it available to any other entity/person/third party, without the prior written consent of Capital Flows.

The S&P is pushing higher. The Russell is outperforming. Oracle is up 12% on the day. Software is finally catching a bid. All of this is happening while most people are still trying to figure out whether the geopolitical shock was a bear market catalyst or not. It was not. Today, I laid out the credit cycle framework for why we are in a melt-up setup, what is driving it mechanically, and where the risk curve goes from here. Below are the main talking points. The weekend paid report is linked in the section below.

LIVESTREAM FROM TODAY:

Today’s Livestream: Main Talking Points

1. Credit cycles are path-dependent, not clock-dependent. There is no predefined length to an expansion. The post-war expansion of the 1960s ran over a hundred months. The one following 2001 ran less than half that. The 2009 cycle ran 128 months before COVID ended it by external shock rather than internal exhaustion. The cycle does not follow a schedule. It follows the sequence of shocks inside it. That shift in framing changes everything about how you allocate capital right now.

2. The geopolitical shock was a stress test, and the balance sheet passed. When a shock moves through the system and nothing cracks, that is not noise. It is information. Corporate leverage at the hyperscaler level is low. AI credit issuance is accelerating through the volatility. Junk bonds have erased March losses and gone positive on the year. The lowest quality credits in the Russell 3000 are sitting near all-time highs. The shock revealed the underlying balance sheet, and it is not what the stagflation narrative requires it to be.

3. Real rates are 48 basis points from turning negative and that is the mechanical trigger. One-year real rates have already made new lows. We are 48 bips from negative. The last time real rates went deeply negative, the system produced a full TINA melt-up where people losing real purchasing power in cash were mechanically forced into risk assets. The Fed pausing into a short-term supply-side inflation impulse produces the same setup. You do not need a cut. You just need the Fed to do nothing while inflation runs above the nominal rate.

4. The equity risk curve moves mechanically with cost of capital, not randomly. When real rates rise and credit spreads widen, capital is forced up the quality curve into balance sheet strength and out of leverage and speculation. When real rates fall and spreads tighten, capital moves back down the curve into high yield, small cap, and non-profitable growth. That is not a sentiment story. It is mechanical. Right now the movement is down the risk curve. High yield outperforming mega cap, low quality Russell outperforming S&P, non-profitable tech beginning to catch bids. These are not coincidences. They are confirmation of the setup.

5. Central bank balance sheets are not the right liquidity input, and that has confused everyone. Central bank balance sheets have been contracting or flat. People who track only the central bank balance sheet said liquidity was falling, equities should not be rising. They were wrong. Liquidity also flows from government bill issuance, private sector debt issuance, fiscal spending, and cross-border flows.

6. The stagflation risk requires two things simultaneously that the current data does not support. Durable transmission of the inflation re-rating into core CPI, and a Fed response that compounds rather than absorbs the growth slowdown. Core CPI projections remain broadly neutral. Base effects are adding downward pressure on year-over-year numbers. The Fed is at pause as the most hawkish available outcome. The stagflation path is not foreclosed, but the evidence for it is not building.

7. PPI this week is the next data point that matters. Headline PPI expected at 4.6%, up over 100 bips from the last print. But ex-food, energy, and trade, the more core component, is only expected at 3.8% versus 3.5% prior. A small acceleration. If core PPI accelerates significantly beyond that, it reintroduces the hike discussion. If it does not, the normalization path holds and the melt-up setup strengthens.

8. PURR and Oracle remain the two largest positions and the thesis on both is unchanged. Oracle up 12% today, software sector finally rallying. Per continuing to make new highs while Bitcoin chops in a range. PURR is the only institutional-grade vehicle for US investors to front-run the Hyperliquid regulatory integration. The macro liquidity setup that is building is the exact environment that makes that asymmetry most powerful.

[SLIDE DECK]

Here is the slide deck and regime dashboard from the livestream today:

Capital Flows Livestream 2026 04 13

3.6MB ∙ PDF file

Download

Download

Credit & Inflation Regime Dashboard

883KB ∙ PDF file

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Download

Weekend Report: Credit Cycle Playbook: Stagflation vs Melt-Up

If you missed the paid report I published over the weekend, this is the one to go back and read before the week gets going. It is the full analytical framework behind the actual sources of liquidity and how they connect to the credit cycle.

Tomorrow: Capital Flows | My largest bets in the credit cycle melt up

Daily at 8:30am MST

Tomorrow I am going to zoom out and explain the two largest bets I am taking in the credit cycle right now: PURR and ORCL

LIVESTREAM FOR TOMORROW: LINK

The information on this website/Substack is for information purposes only. It is believed to be reliable, but Capital Flows does not warrant its completeness or accuracy. The information on the website/Substack is not intended as an offer or solicitation for the purchase of stock or any financial instrument. The information and materials contained in these pages and the terms, conditions and descriptions that appear, are subject to change without notice. Unauthorized use of Capital Flows websites and systems including but not limited to data scraping, unauthorized entry into Capital Flows systems, misuse of passwords, or misuse of any information posted on a site is strictly prohibited. Your eligibility for particular services is subject to final determination by Capital Flows and/or its affiliates. Investment services are not bank deposits or insured by the FDIC or other entity and are subject to investment risks, including possible loss of principal amount invested. Your use of any information which is proprietary to Capital Flows or a third-party information provider shall only be used on individual devices without any right to redistribute, upload, export, copy, or otherwise transfer the information to any centralized interdepartmental or shared device, directory, database or other repository nor to otherwise make it available to any other entity/person/third party, without the prior written consent of Capital Flows.

Credit cycles are path-dependent. The sequence of shocks matters more than any individual data point, because each disruption forces the underlying balance sheet of the system into the open. What was obscured becomes legible. What was priced as stable becomes re-evaluated.

The geopolitical shock currently moving through the system is not a distraction from the credit cycle. It is the mechanism by which the next phase of it becomes visible. The injection of liquidity and credit across the global economy over the past several years did not stay contained within national borders. It moved through cross-border flows, altered sovereign balance sheets, and is now being actively weaponized by economies positioning themselves against the United States in a contest that is fundamentally about technological dominance. Those flows are not discretionary. They are mechanical. And when the purchasing power calculus shifts, whether through nominal or real purchasing power changes, investors on the risk curve do not choose to reposition. They are forced to.

That is the period of time we are living through. This playbook traces the logic of it.

(As a reminder, I am doing a livestream every day at 8:30am MST to build the entire framework incrementally so you can have clarity about WHAT is happening and WHERE we are going. Here is the link for tomorrow morning: LINK)

The Misdirected Narratives About Macro Liquidity:

Read more

CPI came in below expectations this morning. The geopolitical shock is continuing to be retraced. The S&P is almost back to flat on the year after one of the largest energy shocks in US history. What happens next is going to be driven not by the macro narrative everyone is talking about, but by the underlying fundamental flows that have been expressing themselves through this entire period of noise. Today, I ran through every sector in the S&P 500 and pulled the top names by fundamental attribution over the last three months. What you find tells you exactly how informed capital has been positioning and where it is going next. Below are the main talking points. Slide deck embedded below. This weekend I am sending a private report exclusively for paid subscribers.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. The selloff was market beta compression. The signal was which stocks didn’t compress. When geopolitical risk drives a selloff, everything moves together because it reprices the same macro input. But the stocks that resist that compression, that hold or make new highs while the index sells off, are being driven by fundamentals that the sector and the market simply cannot explain. That divergence is the most precise read you can get on where informed capital is actually positioned.

2. The energy sector rallied on crude, but the fundamental leaders are all AI stories. EQT, TPL, CTRA, OKE. Every high-fundamental name in the energy sector is a natural gas play, a royalty land business, or a midstream toll road. None of them are pure crude beta. EQT is the largest US natural gas producer being priced as AI power infrastructure. TPL owns 900,000 acres of Permian Basin royalty and water rights with near-zero cost of capital. The energy sector’s fundamental dispersion is an AI power thesis expressing itself through gas and infrastructure, not an oil thesis.

3. CF Industries in materials is the textbook second and third order effect of the crude shock. Natural gas in, nitrogen fertilizer out. CF’s margins are a spread trade on cheap US gas versus global nitrogen prices. When crude spikes, food inflation follows, and fundamental investors bid CF before the transmission shows up in CPI. It was up 52% over the three month window. Watch CF and BG alongside breakevens. When they begin to make new lows, that is the signal the inflationary impulse is clearing the system and bonds become the trade.

4. Defense in industrials is a structural position, not a geopolitical trade. Northrop Grumman up 20% year to date while the S&P is down. Lockheed Martin outperforming the sector and the index. These are not positions that will unwind on a ceasefire. Defense budgets are structurally higher across NATO, Asia, and the US regardless of any single event. The fundamental attribution in these names reflects a multi-year fiscal tailwind, not a tactical hedge.

5. Consumer discretionary has a Tesla problem. Tesla is making new weekly lows and not bidding on the relief rally. That matters because SpaceX at 95% Polymarket probability of IPO this year creates a capital allocation split for everyone who wants Elon exposure. Once there are two ways to express that trade, Tesla’s premium compresses. Watch the Tesla-SpaceX spread as it develops.

6. EQIX is the single most important name in the entire screen. Up 30% on a three-month basis while the sector is up 6 and the S&P is down. 88% fundamental attribution. The world’s largest data center REIT making all-time highs through a geopolitical selloff is not a coincidence. It is fundamental investors pricing physical AI infrastructure. Watch EQIX relative to IGV and SMH. When EQIX is outperforming the software sector and the chip ETF simultaneously, the market is telling you exactly which layer of the AI stack is being rewarded.

7. The utility sector is now the second most important expression of the AI CapEx trade. NextEra Energy, American Electric Power, SRE. Every high fundamental name in utilities is connected to the power and transmission layer of the data center build-out. Ohio, Virginia and Texas, the three states with the most AI infrastructure under construction, are also the primary service territories for these companies. The semiconductor ETF was the first mover. Utilities and industrials are the second wave.

8. Real rates are only 57 basis points from turning negative and that changes everything. The Fed pausing into a short-term inflation spike is creating a passive liquidity injection. Eurozone real rates already turned negative briefly last week. Japan’s two-year real rate turned positive for only a moment before reversing. When real rates go negative, TINA flows begin. People losing money in real terms on t-bills are forced into risk assets. That is how melt-ups start. The entire fundamental attribution picture across every sector is consistent with a market that is beginning to price exactly that setup.

[SLIDE DECK]

All charts and models from today’s stream:

Capital Flows Livestream 2026 04 10

10.8MB ∙ PDF file

Download

Download

Tradingview Models From Livestream: LINK

Monday: Capital Flows | The Melt-Up Trigger: The Playbook For The Credit Cycle Melt Up

I am doing a livestream every weekday at 8:30am MST because I believe this is the most important time in history to be completely locked in.

The livestream on Monday will be the entire playbook for HOW to play the credit cycle melt-up that is beginning to shape. I will cover how to think about the drivers, the risks surrounding positioning, and why the melt-up will eventually lead to a bear market.

MONDAY LIVESTREAM: LINK

Paid Subscribers: Weekend Private Report

This weekend, I am sending out a private report exclusively for paid subscribers. It will cover the full fundamental attribution of the credit cycle across all major countries, the specific names I am watching most closely heading into next week, the real rate framework applied to the melt-up timeline, and my updated view on and Hyperliquid as the macro liquidity setup develops. This is the most comprehensive breakdown I have put together since the start of the stream series this week. This would be a great time to do a free trial if you haven’t pulled the trigger yet.

7 Day Free Trial

The information on this website/Substack is for information purposes only. It is believed to be reliable, but Capital Flows does not warrant its completeness or accuracy. The information on the website/Substack is not intended as an offer or solicitation for the purchase of stock or any financial instrument. The information and materials contained in these pages and the terms, conditions and descriptions that appear, are subject to change without notice. Unauthorized use of Capital Flows websites and systems including but not limited to data scraping, unauthorized entry into Capital Flows systems, misuse of passwords, or misuse of any information posted on a site is strictly prohibited. Your eligibility for particular services is subject to final determination by Capital Flows and/or its affiliates. Investment services are not bank deposits or insured by the FDIC or other entity and are subject to investment risks, including possible loss of principal amount invested. Your use of any information which is proprietary to Capital Flows or a third-party information provider shall only be used on individual devices without any right to redistribute, upload, export, copy, or otherwise transfer the information to any centralized interdepartmental or shared device, directory, database or other repository nor to otherwise make it available to any other entity/person/third party, without the prior written consent of Capital Flows.

The geopolitical premium is coming out of the system and the market is now re-asking the question it was asking before all of this started: where are real rates going, and what does that mean for everything else? Today I covered the PCE data, the bond positioning shift taking place right now, why the FX market is already pricing the next leg in crude, and why the AI infrastructure rotation is about to become the dominant theme again. Below are the main talking points. Slide deck is embedded below. Paid subscribers get the full breakdown below.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. Real rates just made new lows across the curve and that is the liquidity signal everyone is missing. One-year and two-year real rates both printed new lows today. That is not a coincidence after an oil shock. The crude impulse ran through the system, inflation expectations rose on the short end, and now as crude retreats the Fed’s pause is creating a net liquidity injection even without a cut. When real rates fall and the Fed does nothing, money enters financial markets. That is the setup right now.

2. Stocks are outperforming bonds on the day and that is the pair trade. Long stocks short bonds remains the right expression in this regime. Inflation needs to make its way through the system still, which makes outright long bonds uncomfortable. But stocks can rally through it. You can already see ES making new highs intraday while ZN has not cleared yesterday’s high. That asymmetry is the signal.

3. Bond positioning just had a capitulation and is now rebuilding. CME open interest data shows a massive washout in ten-year note futures earlier this week, followed by new long positioning being rebuilt on Tuesday. Six and a half million DV01 of new longs across the ten-year contract. This means the market has already cleared the peak fear on rates. The setup is for rates to consolidate here, not spike further.

4. Long-term inflation expectations are falling, not rising. Ten-year and thirty-year inflation swaps have been declining even as short-end swaps moved up with crude. The market is telling you this is a supply shock with a time limit, not a new demand-driven inflationary cycle. That is why the Fed is not hiking and why positioning in the Z6 contract has flipped from pricing a hike back to pricing five basis points of cuts this year.

5. The FX market is pricing the next leg down in crude before it happens. Hedge funds are now using currency options on the South Korean won and Chinese yuan to bet on crude falling further. The dollar against the yuan has been moving in lockstep with crude for months. When that pair breaks to a new low, it leads crude lower. Watch dollar-yuan tonight. If it makes a new low, the crude unwind accelerates.

6. There is still massive vol premium in the crude options market to unwind. Implied vol in crude is still running at eighty percent. Call skew just spiked again at the lows as people re-leveraged into calls. That is a contrarian signal. If de-escalation continues, you could see crude vol crush from eighty back to sixty or forty in a session. Same dynamic that caused the gap up can cause the gap down.

7. Gold and silver are set up to rally as macro liquidity expands, not as geopolitical hedges. Gold’s sensitivity to real rates has dropped since 2024 and its drivers have clearly shifted to the quantity of money in the system. Put skew in gold capitulated at the exact low in March, the same moment FX put skew peaked. That was the bottom. Now as real rates fall and the dollar weakens, gold and silver rally on the liquidity injection, not the geopolitical story. This will confuse a lot of people. That confusion is the opportunity.

8. Industrials and materials outperforming tells you where the market is going next. Energy is down on the week but only contributing 22 basis points of negative return to the index because of its small weighting. What matters is industrials and materials leading, which reflects the second and third order transmission of the crude impulse into the real economy, and the AI infrastructure build-out starting to reassert itself as the dominant theme. EQIX just made an all-time high while the rest of the market was sitting flat. The largest data center REIT in the world making new highs with the highest fundamental attribution in its sector is the market telling you exactly where flows are going next.

SLIDE DECK

All charts and models from today’s stream:

Capital Flows Livestream 2026 04 09

2.01MB ∙ PDF file

Download

Download

Tradingview model quantifying the relative stock bond returns: https://www.tradingview.com/chart/pDBgSlBd/

Additional TradingView models:

• https://www.tradingview.com/chart/2f5nDvsW/

• https://www.tradingview.com/chart/HbKBeNCc/

• https://www.tradingview.com/chart/aJ6Sy5b8/

• https://www.tradingview.com/chart/pa0No7P2/

• https://www.tradingview.com/chart/2taQ63im/

• https://www.tradingview.com/chart/kZ8JijHH/ (Models from my friend Alfie https://substack.com/@alfiekerswell)

• If you don’t have a Bloomberg, the CME Tools are your best friend:

  • CVOL CME Tool: LINK

  • QuickStrike: LINK

  • Liquidation Nation: LINK

All the educational primers:

Tomorrow: Capital Flows | The top stocks in each sector setting the tone for traders

Daily at 8:30 am MST

Tomorrow I am going through the names that are being bid by fundamental investors right now, not broad market beta. When the whole market sells off and certain stocks hold or make new highs, that is informed money telling you something. I will walk through the attribution model, break down which sectors and single names are showing the highest fundamental signal, and explain exactly what that means for how you should be thinking about positioning over the next 30 to 60 days. This is the why behind the market move that nobody is mapping in real time.

LIVESTREAM LINK FOR TOMORROW: LINK

Macro Liquidity:

Read more

The geopolitical risk premium is coming out of markets faster than most people expected. Crude went from 117 to 95 overnight, ES gapped up, and the Russell outperformed everything. If you were following the positioning breakdown I laid out yesterday (LINK) and last week, none of this was surprising. What matters now is what comes next -- and that is an entirely different question. Below are the main talking points from today's stream. The slide deck is embedded below those. Paid subscribers get the full equity dispersion breakdown and attribution model output tonight.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. Implied correlation spiked because the selloff was geopolitical, not fundamental. Stocks moved together because they were repriced on the same risk input. When that correlation rolls back over, fundamental dispersion returns -- that is where the opportunity is now.

2. The ceasefire rally confirmed the positioning read from last week. Macro covariance between stocks, bonds, and the dollar was already weakening before the Iran news. The Russell outperforming, EURUSD bidding, gold and silver catching -- all exactly what the positioning setup was pointing to.

3. The selloff was a valuation story, not an earnings story. Geopolitical risk repriced the multiple and the equity risk premium. It did not touch Mag7 earnings, tech earnings, or industrial earnings. If you bought the dip, you bought a valuation compression that is now unwinding.

4. AI CapEx is still accelerating and it is now a GDP story. Microsoft +82% CapEx year over year. Alphabet +140%. Meta +75%. Oracle +100%. AI CapEx is now contributing over a point to US GDP growth. Without it, US corporate CapEx would likely be negative.

5. The five layers of AI infrastructure tell you where flows are going. GPUs, networking, power and cooling, data center REITs, and memory. DLR just hit an all-time high during a geopolitical selloff. Map these layers and you map where the CapEx dollars actually land.

6. Oracle is the most mispriced asymmetric bet in the AI trade. Cloud infrastructure up 84% year over year. 500 billion dollar backlog. Down 54% from all-time highs. CDS spreads pricing more default risk than 2022. Larry Ellison owns 40% of the company and has leveraged the balance sheet to swing for the fences. The fundamental attribution in the model is about to flip (see tradingview model below).

7. The OpenAI IPO is one of the biggest potential melt-up catalysts for equities. 852 billion valuation, 2 billion a month in revenue. If they go public this year, expect a wave of model releases into the IPO window that pulls capital into everything in the AI stack. Watch Polymarket on the IPO timeline -- that is the leading indicator.

8. The dollar makes another leg lower from here. The geopolitical bid is reversing. A weaker dollar means real rates fall faster without a Fed cut. That is the passive liquidity injection that pushes gold, silver, and the equity melt-up scenario forward.

[SLIDE DECK]

All charts and models from today’s stream are in the deck below.

Capital Flows Livestream Wednesday, April 08, 2026

1.4MB ∙ PDF file

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Tradingview Models From Livestream: LINK

Tomorrow’s Livestream: Capital Flows | PCE, Real Rates, and the Melt-Up Setup

CPI prints Friday. PCE prints tomorrow. These are the macro clearing events that will tell us how much of the crude shock transmitted into core inflation -- and therefore how much room the Fed has to let real rates fall. Tomorrow I am mapping the exact levels to watch, what a soft core print means for the dollar and gold, and how the equity melt-up scenario develops from here if the data cooperates.

I am doing a livestream daily at 8:30am MST. TOMORROW’S LIVESTREAM: LINK

Equity Dispersion and Attribution Report:

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Something is happening in the macro regime right now that most market participants are either ignoring or misreading. I spent today’s livestream walking through five interconnected themes that I think are getting underpriced. Below are the main talking points with all the charts and models. Scroll past those for what I am covering tomorrow and what is coming for paid subscribers tonight.

LIVESTREAM RECORDING FROM TODAY: LINK

Today’s Livestream: Main Talking Points (3 min read)

1. Crude implied vol is not telling the same story as spot. The spot price of WTI is back near highs, but call skew is not spiking the way it did on the first two moves up. Vol is elevated but the premium structure has changed. That matters because the positioning behavior around crude right now is connected to hedging activity. Large allocators who are long-duration or running inflation-sensitive portfolios are using crude calls to hedge geopolitical risk rather than expressing directional conviction on the barrel. That is a different signal than outright bullish crude positioning.

2. The WTI-Brent spread is now at its widest since 2008. This is not just a number. The spread between these two contracts maps physical market dislocations in real time. A spread this wide reflects a real supply and demand imbalance in how crude is priced across geographies. Traders watching this spread are watching something the spot price does not tell you.

3. CPI this week is a clearing event, and core is the variable that matters. Headline CPI is expected to come in at 3.4% year over year. Core is expected to accelerate from 2.5% to 2.7%. The question that will actually move markets is not whether headline comes in hot. Everyone already knows headline is going to be hot because of energy. The real question is how much of the crude price impulse is transmitting into core. That transmission rate determines how much optionality the Fed has for the rest of the year. If core comes in below expectations, a significant amount of hedging activity unwinds very fast.

4. Long-term inflation expectations are not rising. That is the key difference from 2022. In 2022, when the Fed was forced to hike aggressively, you had long-term inflation swaps moving up alongside short-term. That reflected a demand-driven inflationary impulse. Right now, one-year swaps have moved up with crude but five and ten-year swaps have barely moved. That is the structural reason why the Fed is not hiking this year even though the forward curve briefly priced a 25bps hike last week. The market corrected that quickly. Watch the Z6 contract. If it spikes back up toward that level this week, that is a fade.

5. Treasury vol is spiking but the setup is for a positioning unwind, not a continuation. 10Y futures vol has surged. That is not a breakout signal. It is a reflection of hedging pressure in the rates market ahead of CPI and whatever happens with the Iran situation tonight. The covariance between stocks, rates, and the dollar has been weakening over the last week. That weakening is the signal that the macro impulse is losing momentum. Mean reversion becomes the higher probability setup from here, not continuation of the regime.

6. EURUSD is pricing a lot of bad news that may not materialize. The Euro has sold off hard because Europe is a net energy importer. When crude spikes, Europe faces an inflation shock that the US does not face in the same way because the US is a net exporter. Put skew in EURUSD has blown out to extremes. If tonight does not produce further escalation and CPI does not come in catastrophically hot on core, the unwind in EURUSD positioning could be sharp. The pair is already showing signs of stabilization at these levels.

7. Real interest rates are the actual macro liquidity signal. One-year real rates have been falling. That is the single most important thing happening in the plumbing of the system right now because falling real rates inject liquidity even without a Fed cut. Five and ten-year real rates are still elevated but the short end is loosening. If this continues into a cleaner macro environment post-CPI, it creates the setup for a significant equity bid, particularly in rate-sensitive segments of the market.

8. The pair trade that makes sense here is long stocks, short bonds. The regime where stocks are down, rates are up, and the dollar is up only occurs about 10% of the time historically. We are in it now and the correlation structure is weakening. The long stocks short bonds trade captures the asymmetry in how these unwind. Gold long, bonds short is the other expression. Russell has been outperforming the S&P this week for a reason. The DAX is also worth watching for a long entry on any intraday dump into macro clearing events.

[SLIDE DECK]

Capital Flows Deck

924KB ∙ PDF file

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Tomorrow: Capital Flows | Equity Dispersion and the Rotation - Mag7, Oracle, and OpenAI

Livestream: Daily at 11:30am EST - We are in such a critical time in the macro and AI endgame that I will be doing a livestream every day of the week at 11:30am EST.

The equity selloff is being read as recession risk-off. That is the wrong frame. Tomorrow I am walking through why this is a rotation and microstructure story, where the crowded positioning was coming into this move, and where the opportunity sits for the next 30 to 60 days.

TOMORROW’S LIVESTREAM: LINK

For Paid Subscribers: The Positioning Report

About an hour after I ended the livestream today, news came across the tape that unwound A TON of the geopolitical premium in the market.

This is exactly in line with the flows I have been laying out for paid subscribers, as well as my comments in the livestream today.

Last week, I made a very clear note that positioning was way too aggressive for the geopolitical risk premia in markets. I noted that the Russell was the best way to express this (link):

The Russell is now outperforming ES and NQ on the news. Understanding these flows are one of THE main things I will be covering in the livestream tomorrow:

As crude as fallen, gold and silver have bid in lockstep with the views I have been laying out in the subscriber chat:

Gold and silver are now bidding on geopolitical risk decreasing. Doesn’t make any sense? People said metals are supposed to bid on geopolitical risk? This is a very narrow view of the drivers of gold as well as the positioning premiums around it. This is going to be THE dynamic I explain below.

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I'm breaking down four themes that I think are getting underpriced by most market participants right now. Livestream starts in 10 minutes

• WTI-Brent spread at its widest since 2008 -- what the physical market is telling us

• Crude options open interest at all-time highs and why that matters for tail risk

• CPI internals ahead of the March print -- energy drag vs sticky core

• What the spike in Treasury vol is actually pricing in 10Y futures

• FX and cross-asset risk premia repricing -- how it all fits together

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If you are brand new to Capital Flows, my goal is very simple: map the macro regime so that I am on the right side of it, and find the few large, asymmetric bets that become home run trades.

Since the beginning of the year, I have been focused on building out a full suite of agentic macro models that quantify the macro regime and identify asymmetric bets in alignment with how I think about markets. I will be sharing some of the outputs below.

Let me set the context before diving into the report:

• My geopolitical framework for the current situation is laid out here: LINK. If you feel like there are a lot of confusing and conflicting opinions on Iran and Trump, read this. It is about the larger structure, not predicting coinflip news events.

• My AI report explaining how the supply chain, adoption, and labor market impact breaks mechanically into three distinct phases: LINK

• All of the educational primers I have written on macro and markets, with a full suite of free models if you do not have a Bloomberg: LINK

With these as context, the positioning note below is going to make a lot more sense, and the market is going to become a lot clearer.

S&P500: How much is geopolitical risk, and how much is the economy?

Notice that on a YTD basis, ever since the negative rolling returns in ES gained persistence, 30% has been driven by geopolitical risk premium.

As I laid out in this video, there are multiple factors causing positioning unwinds in equities from crude, to STIR, to FX (link):

Now here is where we can quantify the STRENGTH of these macro moves even further. This gives us insight into HOW PERVASIVE these forces are, which sets the stage for identifying WHEN divergences take place and how that creates opportunity.

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