Darius joined our friend Nicole Petallides on Schwab Network last week to discuss 42 Macro’s risk management signals, the resiliency of the US economy, the outlook for asset markets, and more.

If you missed the interview, here is the most important takeaway from the conversation that has significant implications for your portfolio: 

The Divergence Between Fed And Treasury Policy Creates A Complex Environment For Investors And Requires An Increased Reliance On Risk Management Signals Over Fundamental Predictions

  • When policymakers are not in sync, investing becomes more challenging. In an environment where all central banks row the boat in the same direction, investors experience a more favorable landscape. However, when signals across global growth, inflation, and policy are inconsistent, managing risk becomes significantly more complex.
  • The US consumer remains resilient, continuing to spend robustly. Our “Resilient US Economy” theme, which we authored in September 2022, is supported by the strong consumer balance sheets and income dynamics we have seen recently. This resilience has been a key driver of the risk-on Market Regime investors have experienced since November.
  • While the market impact of the policy divergence between the Treasury and the Fed remains uncertain, successful investing does not require you to predict the future; what it does require is an effective risk management system, which can help you navigate these uncertain times and stay on the right side of market risks. If you would like to add our proven risk management overlay to your investment process, we are here to help.

That’s a wrap! 

If you found this blog post helpful:

1. Go to www.42macro.com to unlock actionable, hedge-fund-caliber investment insights.

2. RT this thread and follow @DariusDale42 and @42Macro.

3. Have a great day!