Maggie Lake Talking Markets Episode 87: Bond Market "Will Fail To Outperform Cash". With Andy Constan.
Sep 26, 2025
Andy Constan, CEO & CIO of Damped Spring Advisors, dives into the intricate world of macro and fixed-income markets alongside senior advisor Harry Melandri. They dissect the Fed's policies, revealing a divergence between market expectations and reality. Expect discussions on the impact of SOFR cuts and why the market seems overly optimistic about rate cuts. Andy also shares insights on mortgage convexity and its influence on market dynamics, alongside a candid look at his trading career and current asset pricing dilemmas.
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Fed Dovishness Is Relative
- The Fed was dovish in action but not dovish enough relative to market expectations, so bonds sold off.
- Andy Constan says price moves depend on expectations, not just policy changes.
Conflicted Macro Signals
- Macro shows GDP surprising higher, inflation sticky, and conflicting views on jobs.
- Constan argues this mix makes aggressive Fed cuts unlikely and keeps markets uncertain.
'Run It Hot' Trade Is Vulnerable
- Market priced a 'run it hot' economy: long stocks, short dollar, long gold, short long-duration bonds.
- Constan now expects growth to disappoint, making that positioning vulnerable.