Macro Voices MacroVoices #506 Mike Green: Volatility, High-Yield, Precious Metals & More
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Nov 13, 2025 
In a lively discussion, Mike Green, Chief Strategist at Simplify Asset Management, shares insights on market dynamics and volatility. He delves into the impact of passive investing on equities and examines the sustainability of recent market momentum. Green also highlights shifting trends in high-yield bonds and the factors driving the rally in precious metals. Additionally, he tackles geopolitical tensions with China and the implications for U.S.-China relations. With a focus on strategies for yield, he provides actionable advice for navigating today’s market landscape.
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Passive Factor Is Market's Primary Engine
- Passive retirement flows into index funds are the dominant force lifting U.S. equities higher.
- Mike Green estimates this 'passive factor' adds roughly 1,200–1,300 bps/year in excess returns versus mean-reversion markets.
Concentration Comes From Passive Flows
- Crowd chasing and retail speculative surges can exhaust and reverse quickly, but the passive bid narrows market breadth.
- The concentration arises because passive flows disproportionately favor the largest stocks, creating a self-reinforcing feedback loop.
Treasury Volatility Low, Credit Volatility Rising
- Option-implied interest-rate volatility (MOVE) remains low, so extreme Treasury-rate spikes aren't priced in.
- But corporate bond volatility is rising as balance-sheet deterioration pushes credit spreads wider, especially for large tech firms.