AVM's Global Macro CIO Ashvin Murthy on reflation, positive real rates, US dominance, Fed & no YCC
Summary: Our fourth Dragon Interview takes us back to checking in with AVM's Global Macro CIO Ashvin Murthy - Ash walks us through his latest top of mind thoughts, including positioning in the shifting regime, inflation, real yields, no YCC, the Fed & the potential US dominance theme.
Latest Dragon Interviews series, we check in with a very special guest, AVM's Global Macro CIO, Ashvin Murthy
Join the Dragon Interviews series, as Global Macro Consigliere KVP, interviews some of the best of breed players in the craft of steadily compounding wealth - be that across liquid or illiquid assets, global macro investing, venture capital, crypto, equities, commodities, currencies, bonds, private equity, property, etc.
Its all about the craft & the exceptional talented individuals behind their craft.
Post our foundation piece with Global Macro Hedge Fund AVM's Ashvin Murthy in Oct of 2020, we catch up with Ash to get his latest thoughts as we head into a likely series of very key Fed meetings in regards to them being neutral, vs potentially hiking, vs the YCC route.
We touch on a number of things, including:
- Bond yields & real interest rate levels - including context from previous ranges
- Inflation & deflationary forces
- Powell doing a great job at the Fed, letting the market doing the heavy lifting
- Biden administration & the corp. taxes on the way, as a function of funding infra.
- Red hot US economy, all pre the full opening of the country & still with a cold 1Q21 winter, plus with latest +$1.9 trn bill
- Yield curve control (YCC) likely in the pit-stop for a while
- US exceptionalism & the risks to emerging markets, especially the fragile five
- The broader global macro regime that we find ourselves in
Links: AVM Global Opportunity Fund — https://avmglobal.fund/
Watch our debut Dragon Interviews piece here — http://bit.ly/ditvashvin
As always we hope you enjoy the interview as much as we did putting it together, please feel free to share.
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.