Is Paradigm C Outweighing The Fed’s Policy Missteps?

Darius Dale recently joined Maria Bartiromo on Fox Business Network to break down why investors should stay long risk assets amid a historic policy shift. The multiple hundred-plus billion dollar investment commitments stemming from Trump’s reciprocal tariffs—paired with sweeping deregulation and tax incentives—are reinforcing the pro-growth “Paradigm C” regime 42 Macro has championed since late April.

If you missed the discussion, here are three key takeaways that likely have huge implications for your portfolio:

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1) Paradigm C Remains The Modal Outcome

The Trump administration’s strategy is to grow its way out of the debt problem through a combination of broad-based deregulation, tax cuts, and a wave of foreign direct investment into the U.S. (reshoring). Investors who stand in the way of this growth agenda will lose money over the long term, and many are still under positioned for this durable, positive shock to growth.

Key Takeaway: Paradigm C policies are structurally bullish for growth over at least a 12–18-month time horizon, and positioning should reflect that.

2) The Fed Is Already Behind The Curve—Rate Cuts Are Overdue

Darius labeled the Powell Fed’s current stance as its fifth major policy mistake, noting that rate cuts should have already been implemented—a view his former client, Treasury Secretary Scott Bessent, agrees with. He sees markets looking ahead to a potential new Fed chair under President Trump—one who understands the need for lower rates and a higher inflation target.

Key Takeaway: The Fed’s delay in cutting rates risks a faster growth slowdown, but markets continue to rally behind anticipated change at the Federal Reserve.

3) Every Dip Is A Buying Opportunity Amid Paradigm C

Rather than reacting to each trade headline in isolation, investors should see the Trump administration’s aggressive trade strategy as part of a broader, intentional policy sequence that is drawing record foreign direct investment back to the U.S. This context is essential for navigating short-term volatility while staying aligned with the structural growth tailwinds of Paradigm C.

Key Takeaway: Investors must keep the broader framework of Paradigm C at the forefront during any corrections that may materialize in the coming months.

Final Thought: “KISS” Your Portfolio Before It’s Too Late

The Fed’s reluctance to cut rates risks compounding policy error, even as deregulation, tariffs, and record investment inflows continue to power Paradigm C’s pro-growth trajectory. In a market shaped by rapid policy sequencing and shifting monetary dynamics, investors need a framework that filters out headline noise and stays aligned with the regime’s enduring tailwinds.

If you are not confident your portfolio is positioned correctly for the evolving macro landscape, partner with 42 Macro for data-driven insights and proven risk management overlays—KISS and Dr. Mo—to help you stay on the right side of market risk.

42 MACRO RESEARCH SOLUTIONS

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Best of luck out there,

— Team 42

Is The Fed Making Another Policy Mistake?

Darius Dale recently joined Samantha Vadas on Schwab Network to break down the fifth major policy mistake of the Powell Fed dating back to 2018 (e.g., “too late” to stop tightening in 2018, “too late” to ease in 2020, “too late” to start tightening in 2021, asleep at the bank supervision wheel in 2023). During the interview, Darius explains why the Fed is not as data dependent as it claims to be, how tariffs are not inflationary, and why rate cuts are long overdue.

If you missed the discussion, here are three key takeaways that likely have huge implications for your portfolio:

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1) The Fed is Not as Data Dependent as They Claim To Be

Darius challenges the narrative that The Fed operates purely as a data dependent institution. If the Fed was as data dependent as they claim to be, they would treat a leading indicator of inflation–i.e., growth–as a primary signal and respond with a more dovish policy stance.

Key Takeaway: The July Jobs Report, Q2 GDP Report, and the latest PCE Report all point toward the need for rate cuts sooner rather than later to preserve the business cycle. The Fed’s current 2% inflation target is an arbitrary and dangerous goal.

2) Tariffs Are Not Inflationary

Tariffs are not inflationary, and instead, should be treated as one-off price level adjustments that in turn will slow economic growth. Darius urges that the Federal Reserve should not base monetary policy on inflation, the most lagging indicator of the business cycle.

Key Takeaway: The Fed’s continued focus on inflation risks compounding previous policy mistakes, while forward-looking growth indicators point to an acute need for easing.

3) Paradigm C is Here to Stay

Darius reiterates 42 Macro’s “Paradigm C” Thesis that we introduced in mid-late April. Over the medium-to-long term, the Trump administration is committed to growing its way out of historic indebtedness. The administration will continue to pull levers from a fiscal policy, deregulation, and trade policy perspective—eventually resulting in a durable, net positive shock to growth.

Key Takeaway: Any policy-driven volatility in the near-term must be seen as a buying opportunity. Our KISS Model Portfolio is well positioned to benefit from these structural upside risks.

Final Thought: “KISS” Your Portfolio Before It’s Too Late

The Fed’s latest missteps highlight how quickly the policy landscape can shift, and how dangerous it is to anchor decisions to lagging indicators. In an environment where growth signals are flashing red and inflation narratives remain misunderstood, investors need a process that cuts through noise and focuses on forward-looking data.

42 MACRO RESEARCH SOLUTIONS

No catch—just real insights to help you stay ahead in the #Team42 community.

Best of luck out there,

— Team 42

This Is Why Systematic Investors Are Outperforming

Darius Dale recently joined our friends Adam Taggart and Luke Gromen on Thoughtful Money to deliver a high-conviction update on the state of the U.S. economic and policy regimes. He challenged the growth recession consensus, articulated the implications of fiscal dominance, and emphasized the importance of disciplined positioning. Through the lens of 42 Macro’s systematic frameworks—KISS and Dr. Mo—Darius laid out why risk assets remain supported. Bears must use any near-term weakness to recalibrate accordingly.

If you missed the discussion, here are three key takeaways that likely have huge implications for your portfolio:

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1) The U.S. Economy Is Slowing, But Highly Unlikely To Enter Recession

Darius dismantled recession narratives with data-driven conviction. Despite continued pessimism, the macro regime remains risk-on, and market pricing reflects that.

Key Takeaway: The US economy will be fine. Positioning for contraction risks underexposure to structural upside risk amid our Paradigm C theme, which we authored back in April.

2) The Fed’s Reaction Function Will Likely Evolve

The independence of monetary policy is likely to diminish over the long term. “The Fed must become a reactive entity—boxed in by the fiscal dominance regime.” The bar for renewed tightening remains high—supporting a pro-risk asset environment.

Key Takeaway: The Fed will eventually be forced to adapt to fiscal dominance. Policy support is structurally more dovish than consensus appreciates.

3) Narrative Investing Is Dangerous—Process Must Prevail

Successful macro investing demands discipline and repeatability. “At 42 Macro, we rely on repeatable tools to measure and map macro cycles—not subjective narratives.” Using KISS and Dr. Mo, 42 Macro identifies investment opportunities grounded in growth, inflation, and liquidity dynamics—avoiding undue risks in the process.

Key Takeaway: Investors must increasingly reject the use of fundamental research views to risk manage portfolios. The historically wide distribution of probable economic and policy outcomes means regime-aware, systematic frameworks are essential to navigate this Fourth Turning polycrisis.

Final Thought: Navigating What Comes Next

As Darius warns, the speed of change is rapid. This means conviction must be earned through process—not opinion. In a rapidly evolving world, discipline doesn’t just provide conviction—it generates alpha.

42 MACRO RESEARCH SOLUTIONS

No catch—just real insights to help you stay ahead in the #Team42 community.

Best of luck out there,

— Team 42

Is Your Portfolio Positioned for the Economy to Run Hot?

Darius Dale joined Maggie Lake Talking Markets with a clear message: markets are undergoing a structural shift—and investors still clinging to recession fears risk ending up on the wrong side of risk. He explained why 42 Macro’s systematic frameworks—Dr. Mo and KISS—continue to flag risk-on signals across global financial markets.

If you missed the discussion, here are three key takeaways that likely have huge implications for your portfolio:

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1) We Are Likely Headed Into An Economic Boom

Darius challenged the recession narrative head-on: “Labor hoarding, real wages going up, household balance sheets still resilient, and the administration is pulling every lever it can to support demand.” Despite incessant “bear porn” from the media and financial pundits, he emphasized this is a market that is correctly pricing pending economic strength, not collapse.

Key Takeaway: The U.S. economy is likely not L-shaped, it’s U-shaped, and investors that are not positioned for this upside risk will continue to underperform.

2) Paradigm C Continues To Dominate

“We authored the Paradigm C theme—and now it’s becoming THE theme across Wall Street.” Darius described a policy regime defined by persistent fiscal and monetary largesse, reshoring, and broad-based deregulation—each representing a tool the administration is using to engineer the economic “golden age” it promised on the campaign trail.

Key Takeaway: Paradigm C features policies already in motion and is not just a framework. Investor positioning must reflect this reality, not resist it.

3) Narrative-Based Investing Is Fragile

“It’s our job as investors to identify at all times where we are in those five cycles—growth, inflation, monetary policy, fiscal policy, and liquidity—and in relation to the sixth cycle that matters, which is positioning.” Darius cautioned against reacting to Powell headlines, tariff scares, or short-term volatility. Discipline, not distraction, wins in this regime.

Key Takeaway: Investors must be systematic, not sentimental, if they want to stay on the right side of macro and market regime shifts.

Final Thought: Tune Out the Noise

“The market is pricing in a boom—and it’s right to,” Darius concluded. With pro-growth policy, sticky inflation, and ample liquidity, risks remain skewed to the upside. 42 Macro helps investors systematically cut through the noise and focus on what drives markets.

42 MACRO RESEARCH SOLUTIONS

No catch—just real insights to help you stay ahead in the #Team42 community.

Best of luck out there,

— Team 42

Are Markets Underpricing The Power Of Paradigm C?

Darius Dale joined Erik Townsend on MacroVoices Podcast to lay out why investors must position for a pro-growth fiscal regime that could drive substantial upside in risk assets. He argued that consensus is still underestimating the implications of Paradigm C—a structurally bullish policy pivot focused on “growing our way out” of the U.S.’s slow-motion fiscal crisis. Darius reiterates that 42 Macro’s systematic KISS Model Portfolio gives investors an edge by signaling when to lean into bull markets—and when to get defensive the crash(es) that will eventually require a shift to Paradigm D— print our way out of historic indebtedness. If you missed the discussion, here are three key takeaways that likely have huge implications for your portfolio:

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1) Paradigm C Means Running the Economy Hot

Darius explained that the U.S. has fully entered Paradigm C—a phase of fiscal and monetary largesse designed to outgrow the national debt. This regime is pro-cyclical and supportive of risk assets like stocks and Bitcoin. Stimulative tax cuts, deregulation, reshoring, and a private sector credit cycle are reinforcing this durably positive outlook.

Key Takeaway: US fiscal and monetary policy will become increasingly aligned to stimulate growth at all costs, and investors should be positioned accordingly—especially in assets like stocks, credit, and Bitcoin.

2) Structural Forces Are Breaking the Treasury Bond Market

Darius warned that demand for U.S. Treasuries is eroding while issuance is accelerating. Foreign central banks, once price-insensitive buyers, are being replaced by private investors who demand yield. Japan is normalizing policy, Europe is re-militarizing , and China is decoupling—all shrinking global appetite for U.S. debt. This geopolitical capital call raises the risk of a durable bond market repricing.

Key Takeaway: The geopolitically driven supply-demand imbalance in the Treasury market is set to deteriorate despite Paradigm C—pressuring yields higher and making traditional “safe” assets like bonds structurally dangerous.

3) KISS Demonstrably Outperforms Amid the Chaos of a Fourth Turning

42 Macro’s KISS model helps Main Street investors navigate the volatility and complexity of a Fourth Turning regime. Dale emphasized that markets are moving faster, and market cycles feature more amplitude than in past decades. KISS dynamically manages exposure to stocks, gold, Bitcoin, and cash based on proven quantitative risk management overlays—achieving ~250% upside capture and ~50% downside capture relative to a traditional 60/40 portfolio since January 2018.

Key Takeaway: In a world of widening policy uncertainty and faster, deeper market cycles, KISS provides investors with a simple, systematic, and stress-free solution to remain on the right side of market risk. 42 Macro members agree.

Final Thought: Don’t Fear the Shift—Prepare for It

The coming years won’t reward passive investing or narrative chasing. In a Fourth Turning, policy shifts are bigger, cycles are faster, and volatility is the price of opportunity. Darius made it clear: you don’t need to predict the end of Paradigm C—you simply need a systematic approach that will manage risk effectively when the regime changes. That’s the real edge.

42 MACRO RESEARCH SOLUTIONS

No catch—just real insights to help you stay ahead in the #Team42 community.

Best of luck out there,

— Team 42

Is The Next Big Move In Markets Higher Or Lower?

Darius Dale joined Adam Taggart on Thoughtful Money last week to lay out why investor consensus may be under-positioned for substantial upside risk. He argued that Wall Street’s outdated pie chart and target date asset allocation strategies are a liability in today’s increasingly complex macro environment and made the case for why 42 Macro’s KISS—“Keep It Simple & Systematic”—model portfolio helps retail investors manage risk like many of the top hedge funds, which are also clients of 42 Macro. If you missed the discussion, here are three key takeaways that likely have huge implications for your portfolio:

1) Traditional Risk Assets Are the New Safe Havens

Darius emphasized that traditional “safe” assets like U.S. Treasuries and U.S. dollars are increasingly risky in a Fourth Turning polycrisis. With foreign demand for Treasuries declining and U.S. fiscal deficits set to widen under Paradigm C, bonds face structural headwinds. By contrast, stocks, Gold, and Bitcoin—often labeled “risky”—are increasingly the assets best positioned to preserve and grow wealth.

Key Takeaway: The key risk facing investors today is staying anchored to assets that can’t preserve and grow real purchasing power during a Fourth Turning polycrisis.

2) The Growth Surprise Is Still Ahead

Consensus expects stagnation—but Darius sees a policy-fueled “sugar high” driven by retroactive tax cuts, deregulation of the energy, financial services, and tech sectors, and an increasingly asymmetric dovish bias from the Fed. He expects markets to capitulate to stronger growth, dragging earnings and valuations higher into and through 2026.

Key Takeaway: While consensus is still bracing for recession, astute investors like 42 Macro clients have been preparing for a powerful growth-driven re-rating across risk assets for over two months.

3) KISS Outperforms Wall Street’s “Safe” Models—In Both Return And Risk Metrics

Darius walked through the performance stats of KISS, showing how it captures ~250% of upside with just ~50% of downside compared to traditional 60/40 portfolios. From 2018 onward, KISS has delivered ~24% annualized returns vs. ~10% for 60/40, while experiencing less than half the drawdown. By dynamically sizing exposure to stocks, gold, and Bitcoin based on 42 Macro’s proven Market Regime Nowcasting Process and Volatility-Adjusted Momentum Signal (VAMS), KISS helps everyday investors sidestep Wall Street’s volatility drag like the best hedge funds—without paying their exorbitant fees.

Key Takeaway: KISS systematically reduces downside risk while maximizing upside participation—giving retail investors an institutional-grade risk management edge in a volatile world.

Final Thought: The Edge Is Discipline, Not Forecasting

The biggest danger isn’t volatility—it’s relying on gut instinct or outdated pie charts and/or target date asset allocations during a Fourth Turning polycrisis. KISS helps thousands of investors around the world block out the bearish noise to remain fully invested during bull markets and sleep comfortably in cash during bear markets. This is how you retire on time and comfortably.

42 MACRO RESEARCH SOLUTIONS

No catch—just real insights to help you stay ahead in the #Team42 community.

Best of luck out there,

— Team 42

Is Your “Safe” Portfolio Actually Built to Fail?

Darius Dale joined Anthony Pompliano on The Pomp Podcast to unpack three major shifts in today’s macro environment. He challenged the idea that bonds and cash are safe, highlighted the decline in foreign demand for U.S. debt, and outlined why the current regime still supports staying engaged in select risk assets. If you missed the discussion, here are three key takeaways that likely have huge implications for your portfolio:

1) Fiscal Recklessness Is Undermining U.S. Stability

Both parties are spending aggressively with no credible plan to rein in deficits. Even cutting all non-defense discretionary spending would only reduce the deficit from 7% to 5% of GDP—before the tax cuts reduce revenues (relative to baseline) further. With mounting debt and no political appetite for austerity, the long-term fiscal trajectory looks increasingly fragile.

Key Takeaway: Washington’s fiscal mismanagement is weakening U.S. credit quality and leaving fewer tools to manage future crises.

2) There Is A Geopolitically Driven Supply-Demand Imbalance In Treasuries

Foreign demand for Treasuries is fading. China, Europe, and Japan are pulling back due to strategic decoupling, re-militarization, and policy normalization, respectively. Meanwhile, assets traditionally considered “risky”—like Bitcoin, gold, and stocks—are outperforming.

Key Takeaway: As markets trudge deeper into this Fourth Turning regime, traditional “risk” assets are actually the safe havens. The real risk lies in holding bonds and cash.

3) Follow the Signals, Not the Headlines

Darius’s message is clear: stay engaged while the market regime supports it. With policymakers boxed into growing or printing their way out of structural imbalances, disciplined exposure to select risk assets is more important than ever. 42 Macro’s KISS Model Portfolio equips investors to sidestep behavioral traps and compound more effectively over time.

Key Takeaway: Avoid volatility drag and compound returns faster by remaining invested in traditional “risk” assets and only reducing exposure when the market regime tell you to.

Final Thought: The Fourth Turning Is Here

With bonds and the dollar failing to preserve capital, the definition of “safe” has changed. As the U.S. consumes an unsustainable share of global capital and shows little political will for fiscal repair, investors must rethink where real protection lies. The true risk isn’t volatility—it’s being stuck in assets with negative expected returns. As Darius notes, the Fourth Turning is more than a cycle—it’s the new investment reality.

THE MACRO CLASS

No catch—just real insights to help you stay ahead in the #Team42 community.

Best of luck out there,

— Team 42

Printing Toward the Fourth Turning

Darius Dale joined Victor Hugo Rodriguez on Negocios TV to break down the macro forces shaping today’s investment landscape. He reaffirmed our Paradigm C thesis—anchored in pro-growth policy and continued fiscal largesse—and explained why many investors remain underexposed to the assets most likely to benefit. If you missed the discussion, here are three key takeaways that likely have huge implications for your portfolio:

1) Three Key Risks: Growth, Gridlock, and Misunderstood Tariffs

Darius flagged three downside risks in the near term: a policy-induced growth slowdown, legislative gridlock over the expanding reconciliation bill, and fears regarding trade negotiations and tariffs.

Key Takeaway: Each of these negative catalysts is unlikely to be a significant and/or durable headwind for asset markets—especially as Paradigm C continues to play out. We view them as scarecrows to be faded by every investor with a time horizon that extends past this summer.

2) Paradigm C Will Drive Explosive Long-Term Upside in Gold and Bitcoin

Darius reinforced his conviction in Paradigm C—a scenario in which the U.S. attempts to grow its way out of a worsening debt-to-GDP ratio through a combination of fiscal and monetary largesse, deregulation, and reshoring. With U.S. fiscal dominance growing and foreign demand for Treasuries from Europe, Japan, and China declining, the Fed will eventually be forced to fill the gap. This supply-demand imbalance, he argues, is the macro foundation for his bold calls that gold will triple to $10,000 and Bitcoin will appreciate 10x to $1 million over the next ~decade.

Key Takeaway: Investors should treat gold and Bitcoin as long-term core positions to capitalize on the inevitable monetization of U.S. debt amid structural fiscal deterioration and the geopolitically driven supply-demand imbalance in the Treasury bond market.

3) Real Estate Freeze with Rising Prices

Darius warns that tight supply, credit easing, and tariffs on building materials may drive home prices higher even as transaction volumes stay frozen. The result: worsening affordability and a potential political flashpoint in the next few years.

Key Takeaway: Expect home prices to rise again as credit easing revives demand, while policy constraints throttle supply on both the existing and new home fronts.

Final Thought: Positioning for a Macro Regime Built on Growth

Paradigm C continues to unfold, bringing with it both asymmetric upside and structural challenges. Darius urges investors to look beyond short-term noise and position for durable right tail risk for risk assets, especially in stocks, gold, Bitcoin—the three asset classes featured in 42 Macro’s KISS Model Portfolio.

While political volatility may introduce near-term headwinds, the broader policy regime favors growth and asset reflation. Staying systematic and forward-looking will be essential to capitalizing on this historic shift.

THE MACRO CLASS

No catch—just real insights to help you stay ahead in the #Team42 community.

Best of luck out there,

— Team 42

Is Your Portfolio Properly Positioned For Paradigm C?

Darius Dale joined Michael Kantrowitz on What’s Next For Markets to unpack the stark contrast between institutional macro risk management and social media macro, our Paradigm C investment thesis, and what Paradigm C implies for asset markets amid a generally under-invested buy side. If you missed the discussion, here are three key takeaways that likely have huge implications for your portfolio:

1) From Wall Street to Main Street and Back Again

Darius starts by explaining how his unusually humble beginnings was the primary motivation for starting 42 Macro—whose mission is to democratize top-tier institutional macro risk management for the masses. After years of making wealthy clients wealthier at a major research firm, he set out to build a firm where both institutional and retail investors receive high-quality insights at the same time—all for affordable rates that don’t price Main Street out of the market like Wall Street continues to do.

Key Takeaway: 42 Macro’s mission is grounded in access and transparency—offering systematic risk overlays, deeply researched insights, and quality education equally to the many of the top PMs and CIOs across global Wall Street and everyday retail investors alike.

2) Embracing Systematic Discipline After a Personal Wake-Up Call

A painful squeeze throughout Q4 2022 became a turning point for Darius, and he shifted from discretionary macro trading to fully embracing his firm’s systematic signals (KISS and Dr. Mo). While such a dramatic process pivot would be difficult for any investor’s ego to stomach, it significantly increased the value 42 Macro creates for its clients and cemented Darius’ commitment to humility and listening to the market 100% of the time.

Key Takeaway: Success in macro investing isn’t about being right—it’s about staying on the right side of market risk. Check your ego and legacy research views at the door if you want to accomplish this goal.

3) Paradigm C: Stop Myopically Focusing On Tariffs; The Economy Is Likely To Boom

Darius outlines his thesis that the Trump administration has pivoted away from a disruptive Paradigm B (fiscal austerity and maximalist tariffs that incentivize de-globalization) toward a more Wall Street-palatable Paradigm C—combining fiscal largesse, deregulation, and limited tariffs that incentivize some reshoring. While the media unduly focuses on tariffs, the broader regime is structurally bullish for risk assets—particularly stocks, gold, and Bitcoin—and structurally bearish for bonds and the U.S. dollar.

Key Takeaway: Introduced in mid-to-late April, our Paradigm C thesis represents a durable positive shock to growth, and investors are broadly under-positioned for the associated upside risks.

Final Thought: Paradigm C Is the New Macro Roadmap—And 42 Macro Is Your Compass

Paradigm C isn’t a passing phase—it’s the structural backdrop investors must embrace. Fiscal dominance, deregulation, and supply-side reshoring are here to stay, reshaping asset class performance and capital flows. Success in this new regime isn’t about being right—it’s about managing risk systematically, staying humble, and avoiding bearish confirmation bias.

That’s the mission of 42 Macro: to bring institutional-grade insights and systematic discipline to every investor—retail or professional—so they or their clients can retire on time and comfortably.

THE MACRO CLASS

No catch—just real insights to help you stay ahead in the #Team42 community.

Best of luck out there,

— Team 42

Paradigm C: A Playbook For Risk-On Investing

Darius Dale joined Charles Payne on Fox Business Network to explain why markets are embracing his Paradigm C thesis—which is a pro-growth blend of excessive government spending, tax cuts, deregulation, and strategic reshoring. If you missed the discussion, here are three key takeaways that likely have huge implications for your portfolio:

1) Paradigm C = Paradigm A + Tax Cuts, Deregulation, And Strategic Reshoring

Darius reiterates our economic framework—Paradigms A, B, and C—to help investors understand evolving macro conditions. Paradigm A (Biden-era excessive government spending) produced a K-shaped economy, boosting wealth for upper-income households and businesses while leaving the bottom half behind. Paradigm B, feared by markets, implies painful but potentially equitable restructuring via tariffs and fiscal austerity. Paradigm C, however, is emerging as the likely path forward.

Key Takeaway: Paradigm C builds on Paradigm A’s excessive government spending with added tax cuts, deregulation, and strategic reshoring—boosting Wall Street without demanding the sacrifices required for a more-equitable outcome for Main Street.

2) Paradigm C Is Structurally Bullish For Risk Assets And Structurally Bearish For Defensive Assets

Paradigm C creates a bullish backdrop for risk assets. Investors can expect structural tailwinds for stocks, credit, and crypto—while defensive assets like U.S. Treasuries and the dollar face growing headwinds. Darius notes that Bitcoin is already up 17% month-to-date and up 30% since KISS bought Bitcoin back on April 14—signs that markets are already pricing in this regime shift.

Key Takeaway: An even bigger K-shaped economy means a bigger bull case. Although Paradigm C’s gains are skewed to the top like they were in Paradigm A, risk assets are the beneficiaries of both paradigms.

3) Bond Volatility Is A Feature, Not A Bug, Of Paradigm C

With bond yields rising, military budgets expanding, and deficits ballooning, hiccups in the Treasury market—like the recent sloppy 20-year bond auction—are inevitable. But investors should view these as noise, not signal.

Key Takeaway: Don’t fear higher rates—focus on staying long risk assets. Cross-asset volatility emanating from the bond market represent buying opportunities for risk assets in Paradigm C.

Final Thought: Don’t Fight Paradigm C; Embrace It If You Want To Retire On Time And Comfortably

Paradigm C reflects the political realities of the Fourth Turning: fiscal dominance is here to stay amid demands for populism and increased defense and border spending from Main Street amid demands for debt-financed tax cuts and deregulation from Wall Street. For investors, the message is clear—investors should be generally overweight risk assets and underweight defensive assets until something changes. As Darius put it: “When in doubt, think Paradigm C—and buy the dip.”

THE MACRO CLASS

No catch—just real insights to help you stay ahead in the #Team42 community.

Best of luck out there,

— Team 42