Signs that we’re late cycle, the warning shots have been fired

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Signs that we’re late cycle

-Mature Fed hiking cycle
-Commodity rally
-Tech/Financials leading
-Flatter yield curve
-Tight labor market
-Rising inflation
-Peaking PMI
-Surging consumer/NFIB confidence
-Tight credit spreads/low VIX
-High corporate leverage
-Low vacancy

Just comparing it to other cycles… But I would argue high debt levels mean higher sensitivity to rate hikes

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The warning shots have been fired

-equity flash crash /VIX
-realized political risk
-EM carry trade wrecked

Credit spreads are likely to be next. US equities are likely to be the last to go

Progression is slow. But relentless.

We’ve passed peaked growth

h/t @HayekAndKeynes

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