In this episode, the ReSolve team is joined by Julian Brigden, Co-Founder & President of Macro Intelligence 2 Partners, to discuss his outlook on the current macroeconomic landscape, focusing on the secular USD trend and its impact on global markets.
We cover a wide range of topics, including:
• The ongoing debate between inflation and deflation, and the potential consequences of each
• The role of central banks in driving market liquidity and asset prices, and the implications for investors
• The possibility of an impending recession driven by tightening credit, inventory cycles, and housing market adjustments
• Central banks’ ability to foresee economic changes and their willingness to act on them
• The mixed signals and challenges of investing in a market dominated by big tech and its impact on diversification
• The potential for a currency-driven shift in market dynamics, with a focus on the US dollar
• The importance of asset allocation and risk management in navigating an uncertain market environment
• The impact of behavioral biases on decision-making and portfolio management
• The potential benefits and risks of systematic investment strategies in the current market context
• Julian’s thoughts on future trends and potential market opportunities, particularly in the macro space

This episode is a must-listen for anyone interested in macroeconomic trends, currency markets, and the challenges of investing in today’s complex and uncertain environment, offering valuable insights and strategies to navigate these intricate markets.

This is “ReSolve Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick, and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management Inc.
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*ReSolve Global 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 is a registered person with the Cayman Islands Monetary Authority….(read more)

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ReSolve Riffs with Julian Brigden on Peak Dollar, Slowing Inflation, and Economic Landing

ReSolve Asset Management is a quant-focused investment firm that provides investors with systematic investment strategies. In their latest podcast, they invited Julian Brigden, founder of MI2 Partners, to share his insights on key economic topics.

Peak Dollar

According to Brigden, the US dollar has reached its peak. Although the Federal Reserve has been raising interest rates, other central banks have started to follow suit. As a result, the interest rate differential between the US and other countries has narrowed, and this has reduced demand for the dollar.

In addition, Brigden notes that the US has a large current account deficit, which means that the country is borrowing heavily from the rest of the world. At some point, this will have to be paid back, and this could cause a depreciation in the value of the dollar.

Slowing Inflation

Despite the tightening labor market and growth in the economy, inflation has remained stubbornly low. Brigden explains that this is due to a combination of factors, including the globalization of trade, technological advances, and the aging of the population.

Globalization has allowed companies to source goods and labor from cheaper countries, which has kept prices low. Technological advances have also led to lower prices, as automation and artificial intelligence have reduced the need for human labor. Finally, the aging of the population means that there are fewer workers and more retirees, which has reduced demand and inflationary pressures.

Economic Landing

Brigden predicts that the US economy is heading for a soft landing, rather than a hard landing. This means that there will be a slowdown in growth, rather than a recession.

He argues that the Federal Reserve has been cautious in its approach to raising interest rates, and this has allowed the economy to adjust gradually. In addition, he notes that there are still pockets of strength in the economy, such as the technology sector and housing market.

Conclusion

Brigden’s insights offer valuable perspectives for investors who are interested in understanding the current economic landscape. The US dollar may be at risk of depreciating, despite the Federal Reserve’s policy of raising interest rates. Inflation is likely to remain low, due to global factors and demographic trends. Finally, the US economy is expected to experience a gradual slowdown, rather than a sharp contraction. Investors would do well to consider these factors when making their investment decisions.