Forward Guidance Markets Haven’t Priced In The End of Fiscal Tailwinds | Andy Constan
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Aug 6, 2025 
Andy Constan, Founder & CIO of Damped Spring Advisors, offers a compelling analysis of macroeconomic trends impacting today's markets. He emphasizes a cautious Federal Reserve at a critical juncture, alongside fiscal policies that might induce contraction as tariffs come into play. Contradicting the prevailing 'run it hot' market narratives, Constan presents data indicating a slowdown is already underway. His insights shed light on the complex interplay of government financing strategies and economic indicators that could shape the financial landscape.
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Fed's Uncertain Leadership Dynamics
- The Fed is at a leadership crossroads with uncertain monetary policy direction.
- Dissenting votes signal an ongoing debate about rate cuts and independence.
Moderate Rate Cut Expectations
- Market pricing assumes moderate rate cuts after Powell leaves, not aggressive ones.
- Fiscal reasons cited for cutting rates don't add up to large deficit savings.
Treasury Buybacks and Money Supply
- Treasury increased buybacks slightly but underwhelmed market expectations.
- Replacing bonds with bills increases money supply, which can devalue money and stimulate the economy.