Global liquidity isn't being shaped by the Fed Today's markets are all about trade flows, geopolitical risk, and how capital moves across currencies 🧵Summary of our latest interview with @Globalflows

Credit (not the Fed) drove the spring/summer rally. ➤ Inflation expectations rose while real rates fell, creating a positive liquidity impulse ➤ Credit spreads tightened, issuance surged, and equity breadth exploded ➤ IPOs and high-beta names ripped as capital moved out the risk curve All of it was classic liquidity > narrative dynamics.

The recent hawkish pivot isn’t recessionary ➤ Inflation expectations rolled over ➤ Real rates pushed higher ➤ Cuts were priced out, but the long end isn’t screaming policy error If this were real stress, bonds would be bid and the curve would flatten. It isn’t. Macro loves to look scary, but the signals don’t support doom.

Households aren’t the problem, public debt is. ➤ Household leverage is nowhere near 2008 levels ➤ Public debt/GDP is what’s exploding ➤ That makes currency + trade flows far more important than mortgages If you’re forecasting a housing-led recession, you’re fighting the wrong war.

@Globalflows Auto-loan delinquencies = a sector issue, not an economy issue. ➤ Some stress is showing up in auto credit ➤ But large banks + private credit are absorbing the weak players ➤ No transmission into systemic risk It’s a rotation story, not a recession story.

@Globalflows Breadth is splintering, and dispersion is back. ➤ MAG7 is digesting leverage, CDS widening, and CapEx overhang ➤ Biotech, utilities, and other defensives are catching flows ➤ The era of “just own the index” is fading Pick your spots because this isn’t April–August anymore.

Cross-border flows matter more than the Fed. ➤ The U.S. has the most negative current account in history ➤ Foreigners recycle USD into U.S. equities and debt ➤ High valuations = FX + liquidity sensitivity, not “bubble” behavior Ignoring global flows is how you get macro totally wrong.

Bitcoin flunked the “neutral asset” test—for now. ➤ The April rally was driven by treasury-company flows, not fundamentals ➤ Heavy insider activity + SPAC/IPO liquidity diluted the move ➤ BTC then underperformed SPX while capital chased AI/biotech Risk asset first, reserve asset second. Reality > ideology.

@Globalflows If you want a neutral geopolitical hedge today, it’s gold. ➤ Gold priced the shift in cross-border liquidity far earlier than BTC ➤ Miners still offer torque ➤ FX + real-rate volatility is driving the entire trade Sometimes the old assets still do the job.

U.S. equities remain the center of gravity. ➤ Foreigners must reinvest their USD inflows ➤ Carry trades reinforce equity strength ➤ Every G10 equity index is elevated because global flows are interconnected The tail risk isn’t “equities crash,” it’s that liquidity whipsaws harder and faster.

@Globalflows Key Takeaways: ➤ Credit, not the Fed, drove the 2024 rally ➤ Real rates up = normalization, not recession ➤ Cross-border flows now dictate asset valuations ➤ Geopolitics is the biggest liquidity driver ➤ Gold > BTC as a geopolitical hedge (for now)

@Globalflows Check out the full episode & more below! ↓ ➤ YouTube 🎥: ➤ Apple🎙️: ➤ Spotify🎙️: