Forward Guidance Why Everyone Keeps Misreading The New Macro Regime | Ben Kizemchuk
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Sep 3, 2025 Ben Kizemchuk, a Portfolio Manager at Wellington Altus, presents his intriguing 'Four Fs' macro framework: Fiscal Dominance, Financial Repression, Fiat Currency, and Passive Flows. He reveals how these elements converge in today's economy, reshaping growth dynamics and stabilizing markets. Kizemchuk discusses the unexpected economic resilience following interest rate hikes and the critical role of government spending in promoting stability. He also explores the implications of an AI-driven future where stock markets and the economy become increasingly intertwined.
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The 4Fs Create A New Regime
- Ben Kizemchuk defines the 4Fs: fiscal dominance, financial repression, passive flows, and fiat money as a unique concurrent regime.
- He argues this convergence creates a new "stock market economy" where markets and the real economy are deeply entwined.
Fiscal Spending Became The Baseline
- Fiscal dominance means persistent government spending has become the economy's baseline rather than emergency policy.
- That spending can swamp or offset Fed tightening because higher interest payments recirculate into private spending.
Factor Persistent Fiscal Growth Into Analysis
- Recognize government spending trends: fiscal outlays have compounded ~5.5% annually since 1985.
- Use that persistent fiscal baseline when assessing macro stability and corporate profit exposure.