Macro Regime Tracker: Geopolitical Flows
Macro regime and risk assets qualified clearly
The Macro Regime Tracker offers a daily lens on how shifts in growth, inflation, and liquidity affect short-term risk and reward. Leveraging machine learning, AI, and cross-asset data, it identifies macro changes and their impact on market positioning.
Macro Regime Tracker Index:
Macro Regime Context
Macro Tear Sheets: Equities, Fixed Income, FX, Crypto, and Commodities
Macro Regime Dashboard: Excel spreadsheet for economic data and interest rates
Growth, Inflation, Fixed Income, Credit, and Equities Regime Tracker
AI and Machine Learning Strategies - Macro Regime and Positioning Premiums Strategies: S&P 500, 2-Year Interest Rates, Gold, and Bitcoin
Macro Regime Context:
I have been consistently laying out in the reports on Capital Flows that equities remain skewed to the upside. I also recorded a video today explaining HOW these flows are functioning:
We have been compressing in this range for ES during the geopolitical risk, but the underlying macro regime continues to show a growing economy. When you compress in a range like this from geopolitical risk and then that risk decreases, equities rally:
This is exactly what happened today with the announcement by Trump:
The news about Iran trying to bomb a US base caused crude to sell off aggressively from the highs, retracing the entire move from the geopolitical risk. From here, we could bounce marginally but its clear that crude is likely to remain below these highs for the time being.
What is going to happen? This will be laid out further in the report for paid subscribers, but I want to draw your attention to one specific dynamic. We are pricing over 50bps of cuts for this year by the Fed in the Z5 SOFR contract. In my view, it is going to be incredibly difficult to price 75bps. It is still unclear of how much of the bid in bonds was purely from the geopolitical risk or how much is already pricing what comes after the higher crude prices make their way into headline CPI.
Needless to say, understanding interest rates will be critical for the next 90 days.
Main Developments In Macro
US Monetary Policy / Fed Commentary
Fed’s Goolsbee:
Doesn’t see 1970s-style stagflation
Tariff inflation impact hasn’t been as bad as feared
Little inflation in past 3 months
Could support cuts if “tariff dirt clears”
Fed’s Bowman:
Would support July cut if inflation remains subdued
Sees upward price pressure from tariffs as offset
Labor market solid but could weaken
Supports June rate hold
US yields fall further after Bowman signals July rate cut possible
Treasury 5-year yield drops 10 bps to 3.86%
Geopolitics – Iran/Israel and Oil Markets
Trump announces Israel-Iran ceasefire (multiple confirmations on Truth Social, Fox News)
Ceasefire begins in 6–12 hours
“Officially Iran will start the ceasefire”
No Americans harmed; minimal damage
Trump: “Encouraging peace” and Israel should “also pursue peace”
JD Vance (US VP):
“We want a direct conversation with Iran”
“Hope Iran won’t rebuild nuclear program”
“Need long-term settlement”
Qatar confirms:
12 missiles targeted Al Udeid US airbase, one hit base, no damage
Intercepted Iranian missile barrage
Airspace reopened
US Embassy in Qatar lifts shelter-in-place order
WTI crude oil slumps >5% on ceasefire news
Trump notifies Congress of prior Saturday strikes on Iran
Trump: Iran strike sites “totally destroyed”
Iran: Further response will be ‘proportionate’
France's Macron: US strikes on Iran have “no legal basis”
China urges citizens in Qatar to avoid Al Udeid
US: No casualties at Qatar base
Macro Tear Sheets: Equities, Stock/Bond Correlation, Fixed Income, FX, Crypto, and Commodities
Macro Regime Dashboard: Excel spreadsheet for economic data, interest rates, and real estate.
Momentum and Mean Reversion Models: Equities, Commodities, Fixed Income and Currencies
You can find the educational primer and video explanation of these models here: LINK
Here is a summary of all models and their directional strengths:
Growth, Inflation, Fixed Income, Credit, and Equities Regime Tracker
The Macro Regime Model offers a real-time view of growth, inflation, and yield curve dynamics, integrating these with credit market shifts, equity risk premiums, and positioning data. It connects upcoming catalysts to statistical drivers of asset prices, creating a unified framework that quantifies skew and clarifies risk-reward across asset classes.
Keep reading with a 7-day free trial
Subscribe to Capital Flows to keep reading this post and get 7 days of free access to the full post archives.