Andrew Perry

Another excellent weekly contribution from @YraHarris at MacroPillars. This week, Yra continues to follow the divergences building across grains and energy. He also touches on the rice supply shock, Bessent’s pressure on Trump, Warsh, the Fed, QT, the long end, Japan’s policy mistake, the yen, JGBs, and why the market may be far too complacent. The section on Warsh, QT, and the long end is especially important: “I understand the market moving them higher in anticipation, and with all the talk of higher inflation, but I just don’t see it happening, especially into the election. The market might push this, but it doesn't really have the power to do so in the short end. So if they take it out on the long end, it’s going to be a real problem for Scotty and some others, and I think that’s what scares them the most. In terms of the front-end tightening in the US, with Warsh coming in and embarking on quantitative tightening, there is no way they will actually raise rates. They have to see how it plays out and what effect it has, because they will be curtailing bank reserves in a big way, and we know they already brought in the RMP from 40 to 10 billion. Warsh is smart and respects markets; Powell says he respects markets, but I don't think he does, because in 2018, he made a categorical mistake, as Druckenmiller dubbed it "the double shotgun" approach. If you're doing quantitative tightening, you hold rates; if not, cut rates, and see where it goes.” Sign up for a 14-day free trial to receive the full article and all Macro Pillars research. buy.stripe.com/8x27sNfwK17ld3…

Mahkemede verdiği örnek kararlar ile tüm dünyada sevilen Yargıç Frank Caprio yaşadığı kanser nedeniyle hastaneye kaldırıldıktan sonra hayatını kaybetmişti. Yargıçın Caprio’nun son sözleri: “Lütfen beni unutmayın ve dualarınızı eksik etmeyin.” olmuştu… 🥹❤️

@MichaelPascoe01 Are you serious, or are you and Kouk drinking the same Cool Aid? Australia had the highest inflation rate in the developed world as it entered the War. Inflation is evil and must be addressed, respectfully, sir.

Fishwrappers aren't giving much prominence to the unemployment rate hitting 4.5% today - a year earlier than the RBA and Treasury forecast in the past couple of weeks. The single RBA board member who voted against the latest rate rise could be forgiven for saying "I told you so"

Our liquidity models have tightened considerably, driven principally by the rise in the MOVE index, and the Fed's reduction of the Reserve Management operations from $40 billion to $10 Billion. Live Calculated Value: Models excluding MOVE = YoY %: -2.37% Models including MOVE = YoY % (incl MOVE): 11.89% down from +78% on 20th April 2026 We are wary of the current dissonance between price and our models. From here, we will take instruction from how assets respond around our key dates, and whether we see any meaningful shifts in the curves. If you are interested in following our work, we are currently offering a 14-day free trial to MacroPillars Core. More here: macropillars.com S&P500 in blue, MacroPillars liquidity model, including the MOVE in orange.

Our first MacroPillars midweek update is live. The bond market is starting to say it has had enough, and yields are beginning to come for the AI trade. With liquidity deteriorating, bond volatility rising, and positioning still very long, the bull case now needs a lot to go right to sustain current levels. In this video, we walk through our daily process, the pillars, and how we are trading this market right now. Watch here: youtube.com/watch?v=1v4Y8h… 14-day free trial: macropillars.com

Inside MacroPillars’ daily process: how we are reading the pillars and expressing risk this week.

@biancoresearch Jim, looking at the inflation crisis 1972 to 1976 stocks got smashed when inflation took off, and gold to stocks and gold to bonds outperformed, at the moment gold is underperforing bonds and stocks... thoughts?

As pointed out below, “stocks are increasingly seen as an inflation hedge,” so fund managers are piling in. The idea that stocks are a hedge against inflation is not new and has not worked for over a century. BofA’s Michael Hartnett’s latest “Flow Show” from Friday: * above 4% on CPI where risk assets get twitchy… past 100 years once CPI crosses 4% on average SPX -4% next three months, -7% next six months.” Note that year-over-year CPI inflation was 3.8% through April. Warren Buffett warned about this almost 50 years ago: Fortune, May 1, 1977 Buffett: How inflation swindles the equity investor “For many years, the conventional wisdom insisted that stocks were a hedge against inflation. The proposition was rooted in the fact that stocks are not claims against dollars, as bonds are, but represent ownership of companies with productive facilities. These, investors believed, would retain their value in real terms, let the politicians print money as they might.” He goes on to describe when this belief peaked: “This heaven-on-earth situation finally was ‘discovered’ in the mid-1960s by many major investing institutions. But just as these financial elephants began trampling on one another in their rush to equities, we entered an era of accelerating inflation and higher interest rates.” Finally, note that fund managers’ top three tail risks are in the chart on the right: * Second wave inflation (40%) * Geopolitical conflict (20%) * Disorderly rise in bond yields (18%) These three risks total 78%, and they could be argued to be variations on the same theme – the war will continue to drive crude oil prices higher, creating a second wave of inflation and higher bond yields. ---- “Those who cannot remember the past are condemned to repeat it.” – George Santayana, from The Life of Reason (1905)

We continue to maintain our primary position: Short the underprepared energy and food importers (ASX and DAX), Long food (Corn, Wheat, and Soybeans). The position continues to trend well and has been assisted by the agriculture deal announced from the Trump–Xi summit, an outcome we had been anticipating through the pillars. Weekly Report 9th May 2026: ap5.cmail20.com/t/t-e-wddjhkl-… If you are interested in following our work, we are currently offering a 14-day free trial to Macro Pillars Core. Head to our website to find out more: macropillars.com

Macro Pillars caught up with our good friend @YraHarris on today’s Monday Macro call. Yra also contributed to this week’s long-form note, sharing his thoughts on the Trump-Xi trade summit and the potential implications for agriculture, commodities, China, and the broader market setup. Watch our market breakdown and catch-up with Yra below, including how we are setting up the week ahead. youtube.com/watch?v=OM8DOc…

Latest QRA - 6 May - mark the date. Give @MacroPillars a follow to understand some of the overlooked macro and technical factors moving markets, including non-traditional liquidity. $SPX $ES $SPY $NDX $NQ $QQQ #GOLD #SILVER

At Macro Pillars, we monitor liquidity events and incorporate the price response to those dates into our models. Since November 2023, when Treasury Secretary Yellen changed the US Treasury's funding duration to issue fewer coupons and more bills (i.e., Treasury QE), Macro Pillars has focused on the Quarterly Refunding Announcement (QRA) aggregate and composition each quarter. The Chart below demonstrates how instructive they have been. S&P500 - Daily Chart - Marked with QRA dates. Information is great, but if you can't risk manage it, what is it really worth?

@dampedspring @Crowded_Mkt_Rpt I think you need another 6 months off twitter

@Crowded_Mkt_Rpt also besides chips there is no bubble yet and chips may not be a bubble either.

you cannot have a bubble when everyone is calling it a bubble. that is not how it works. in fact its by definition the opposite of how it worlks. bubbles are born of participation, not price.

Lower yields in Europe on Friday were possibly the first sign that, potentially even after a hawkish ECB, the most exposed region in the world to the crisis is about to be hit with a demand shock first. While the market may like a bull steepener (short-term rates falling faster than long-term rates) initially, we don't believe the equity markets will make new highs in Europe, and we retain long agriculture against short DAX as our primary position. Food prices have been the last to move, and those prices are going to be a more significant shock to the economy; while oil is important, eating food is more so.

US inflation expectations are surging: The US 10-year breakeven rate is up to 2.47%, the highest since February 2025. Excluding Q1 2025, this is the highest level since October 2023. In turn, 1-year inflation expectations are up to 3.26%, the highest since September 2022. Furthermore, 2-year inflation expectations are up to 2.81%, the highest since November 2022. All while US consumer 12-month inflation expectations remained above 6% for the 2nd consecutive month in April. Inflation is back.

Yields are maintaining their bid, yes, and in Macro Pillars’ view, they are trying to break the stock market. The current supply shock out of the Middle East is already becoming a major inflation shock, with record rollover and issuance of up to $11 trillion in the bond market that will not assist in 2026. What we are watching for now is the point where the bond market breaks equities, the world rushes into bonds, and yields collapse. That is the moment where the supply shock becomes a demand shock in the real economy. A bull steepener may initially be bullish, but it would convey a different message: it would signal that the energy shock is starting to impact the real economy, shifting from a supply shock to a demand shock, just as consumer confidence in the United States is at an all-time low.

Bond yields ripping higher:

The governor has a lot to consider. We will focus on the response in the IB market and take guidance from the curves. The lucky country hasn't faced a real recession since the early nineties, due to the rise of China and significant immigration (we have had a per-capita recession). MP believes Australia is about to be punched in the face.

@MacroPillars_ @ANZ_AU @RoyMorganAus I appreciate the high level of analysis. It’s rare to get comments of this standard. Could we get 50 points rise tomorrow or you think they stick with 25?

RECORD LOW ALERT: Australian consumer confidence has crashed. The ANZ-Roy Morgan index fell 4.3 points last week to 58.8 — the lowest reading in over 50 years since records began in 1973. It is lower than during the worst of the COVID lockdowns. The long-term average since 1990 is around 110. This chart is brutal: families hammered by record petrol prices, soaring costs, and an economy that’s failing everyday Aussies. We are in a recession and will have a long one. Book it.

Yields are maintaining their bid as you point out, and in Macro Pillars’ view, they are trying to break the stock market. The current supply shock out of the Middle East is already becoming a major inflation shock, with record rollover and issuance of up to $11 trillion in the bond market that will not assist in 2026. What we are watching for now is the point where the bond market breaks equities, the world rushes into bonds, and yields collapse. That is the moment where the supply shock becomes a demand shock in the real economy. A bull steepener may initially be bullish, but it would convey a different message: it would signal that the energy shock is starting to impact the real economy, shifting from a supply shock to a demand shock, just as consumer confidence in the United States is at an all-time low.

The April rally was partly driven by the steepening of the back-end curve globally, even as the front end continued to tighten. Combined with extreme positioning and liquidity from the hand of God (Treasury Secretary Bessent), that shift caught the market badly off guard and helped fuel the fastest rally in US markets in 85 years. But the important point now is that while US equities are making new nominal highs, the curve has not bear steepened to new highs. If it rolls back into a bear flattener from here, inflation hedges will be exposed, that is, long risk. A bull steepener may initially be bullish, but it would convey a different message: it would signal that the energy shock is starting to impact the real economy, shifting from a supply shock to a demand shock, just as consumer confidence in the United States is at an all-time low.

The 30-year yield is now 8 bps away from a new 18-year high.

@markbouris @TheKouk This guy didn't want to raise rates, and that's why we entered the crisis. with the highest inflation in the developed world - you can do a lot better than interview him

“Consumers feel worse now than they did during the pandemic.” Always enjoy talking to my mate @TheKouk about the economy, the RBA's movements and what the data is really telling us. Search Property Insights everywhere you get podcasts to listen!