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 market regime, inflation, real yields, no YCC, the Fed & the potential US dominance theme - which judging by where the DXY & gold closed on Fri Mar 26, at 92.766 & 1732.52 is still largely mispriced by the market.
A US dominance theme should see much strong US Dollar (DXY easily back above 94 to 96 lvls), gold getting hosed potentially back to $1580/$1530 lvls -9% to -12%, as well as US equities outperforming Emerging Markets & Euro-Zone equities, plus higher US bond yields & overall higher real rates. In addition to US economic data, the Fed meetings of Apr 28 & especially Jun 16 are going to be pivotal..
Republished for the Weekend-Warriors - we check in with AVM's Global Macro CIO, Ashvin Murthy from our Dragon Interviews series
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.
We originally published this interview on Wed 17 Mar 21, before the Fed meeting that later saw them upgrade their US GDP expectations to +6% - a figure that Ashvin feels could be passed.
Those looking for faster playability options & one landing page for all the interviews can check-out our Dragon Interviews Channel here.
We will have a crypto focused interview that should be published in early Apr.
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.
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Energy crisis could turn energy stocks into secular winnerWith long-term expected returns for the global energy sector close to 10%, we look at 40 stocks that could be set to cash in.
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.