Andy Constan returns to Excess Returns to break down today’s macro environment using his Four-Pillar Framework — growth, inflation, risk premia, and flows. Drawing on lessons from his time at Bridgewater and Brevan Howard, Andy explains how he blends systematic and discretionary approaches to form a clearer picture of markets. He discusses the AI-driven CapEx boom, the economic effects of tariffs, Fed independence under Trump, and why the current setup could produce extreme outcomes in either direction.
Topics covered:
Systematic vs. discretionary macro investing
Andy’s Four-Pillar Framework: growth, inflation, risk premia, and flows
How AI CapEx is driving growth — and what happens when it stops
Tariffs, policy shifts, and their impact on inflation and growth
The Fed’s independence and what it means for markets
Risk premia, volatility, and asset allocation in uncertain environments
How major flows and corporate buybacks shape market direction
Why Andy sees a “digital” macro environment with binary outcomes
Timestamps:
00:00 Intro and setup
02:00 Systematic vs. discretionary macro investing
14:00 The Four-Pillar Framework explained
22:00 Growth outlook and AI-driven CapEx boom
33:00 The real impact of tariffs on the economy
39:00 Thinking in probabilities and constructing macro portfolios
40:00 Fed independence and policy alignment
47:00 Labor market dynamics and AI uncertainty
48:30 Risk premia and asset allocation
56:00 Flows, buybacks, and corporate debt
01:00:00 What Andy’s watching next
01:06:00 Why macro outcomes have never been more digital
