Alfonso – also known as MacroAlf – joined Adam and Mike to discuss his most recent report entitled “Yes, But When Recession?” Our conversation covered:

• Alf’s experience managing a $20B multi-asset book at a global bank
• Experience launching an independent macro newsletter for greater freedom of views
• Benefits of interacting with central bankers, regulators and senior officials at the bank
• Currently focused on recession – when and how bad will it be?
• Economic, social and market impacts of recessions
• How recession might change the Fed’s reaction function
• Powell and other central bankers questioning the benefits of QE and whether Fed may have a different reaction function this time
• Exploring the pros and cons of QE
• Why banks lend, and why they didn’t want to lend over the past decade of QE?
• Powell’s focus on Volcker and implications for policy trajectory
• Expectations for a second leg down and the 2000 – 2002 analog
• What happens in bear markets after Fed pivots?
• Prospects for a longer, grinding bear market
• Impact of high returns on cash competing with low returns on real estate and other risk assets
• Character of stock market bottoms in a cyclical downturn
• Market indicators of recession and inflation risk using Alf’s Volatility Adjusted Market Dashboard
• Negative credit impulse signaling recession in Q2 2023
• Impact of rate of change vs level of credit given enormous surge in bank reserves in 2020
• Leading indicators suggesting recession in late Q2 2023
• Housing market and Sahm Rule implying recession in Q2 2023
• Expectations for returns on stocks, bonds and other assets over the next several years

*ReSolve Global Inc. refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global Inc. is a registered person with the Cayman Islands Monetary Authority.