Published every Sunday

The MacroScope Weekly Letter

Every Sunday, we break down what happened through the week and what it means for markets, read through the lens of the regime framework. No noise, no speculation.

Each letter also covers how the growth, inflation and liquidity composites developed, and how the model portfolio is positioned and why.

Recent letters

October 11, 2026

Borrow, Debase, Grow

Japan is showing the rest of the world how the debt story ends, and we think the US will run the same play. The 10-year is at its highest since 2002, but AI growth is outrunning it. Reflation / Contracting holds as collateral & funding slides to -0.72, and the October 1st rebalance rotated the book into semiconductors. Also: why importing Russian diesel is more risk than reward, and our view on how different assets fare in a world of debt and debasement.

DebtRatesAIReflation
September 27, 2026

A Quiet Week, and Oil Finally Cools

A calm week on the news front, with the one headline that matters being oil cooling after topping out around $105 on reports that Hormuz could stay open to traffic. Reflation / Contracting holds as collateral & funding slides for a fifth straight week to -0.68. Also: why Trump has every reason to get the Iran situation under control, and why the US cannot let China get ahead on technology.

OilIranChinaReflation
September 20, 2026

Warsh Hikes, But Will He Hike Again?

The Fed hiked 25bp under Warsh, which we read as a credibility move after a shaky July rather than a data call, and we don't think the further hikes in the dot plot will come. Reflation / Contracting holds as collateral & funding sinks to -0.60. Also: why the US has to grow its way out of the debt, whether AI extinction warnings are marketing, and agentic crypto payments up 500% in three months.

FedDebtAIReflation
September 13, 2026

Bessent Calls Himself the House, Yields Don't Listen

Reflation / Contracting holds as growth extends its climb to +0.39 on a genuine turnaround in the distribution pillar, while liquidity stays pinned in a shallow negative range and collateral & funding stalls despite the Treasury's tripled buybacks. The US-Iran war shows no sign of ending, a reported Iran-Oman deal over the Strait of Hormuz would tighten Iran's grip on the chokepoint, Japan sold Treasuries anyway to defend the yen, and Bessent's "I'm the house" bravado is a credibility problem now that yields aren't listening.

ReflationIranYieldsFed
September 6, 2026

Growth Spikes, Liquidity Snaps Back Negative

The September 1st rebalance lands as liquidity reverses hard back to Contracting after just two weeks Expanding, while growth spikes to its strongest print of the cycle. Yields keep rising as Iran escalation (not de-escalation) pushes oil and diesel higher and keeps inflation sticky, splitting the Fed between Warsh's hawkish September pricing and Waller's dovish pushback, while Bessent works to keep Japan, the largest foreign UST holder, on side.

ReflationLiquidityFedIran
August 30, 2026

The War's Own Cost, and the TGA Gets Named

Reflation / Expanding holds for a second week as liquidity stays comfortably positive and collateral & funding continues improving, confirming last week's read on the Treasury buyback's effects. Inflation cools off a mid-week peak but stays elevated on sticky diesel costs tied to the economic-warfare campaign against Iran, CNBC reports Treasury officials are eyeing the TGA to fund the long-end buyback increase, and NVIDIA's blowout print keeps AI demand looking unbroken.

ReflationLiquidityIranNVIDIA
August 23, 2026

Liquidity Flips, the Buyback Shows Its Hand

Liquidity crosses positive for the first time in a month, flipping the overlay back to Reflation / Expanding. Growth firms to +0.20 and the portfolio's base weights snap toward growth and liquidity as cash gets cut to 10%. The Treasury's long-end buyback is the week's real story, debt management, not QE, but a clear signal that rates are staying low to keep the AI-driven growth trade alive, with gold, bitcoin, and the debasement trade all re-rating on the read-through.

LiquidityTreasury BuybackDebasement TradeFed
August 16, 2026

Credit Prices the AI Buildout, Gold Reads the Fed

Reflation / Contracting holds a third week, but liquidity stops falling, essentially flatlined at -0.002 after two weeks of sliding. Growth firms to +0.20 as financial conditions turn positive for the first time in weeks. Inflation eases back to +0.17. The book holds its August 1st weights into the September 1st rebalance. Credit spreads widen on the AI buildout without crisis stress, new data puts the AI capex boom's GDP impact ahead of the railroad boom, gold's revival and falling rate-hike odds look like the same trade, Airbnb's AI-driven 17% revenue growth flags the application layer as the next leg, the yen intervention looks to have failed, and crypto's total lack of buzz has us watching closely.

LiquidityAI CapexGoldFed
August 9, 2026

Less Defensive Than It Looked

Reflation / Contracting holds for a second week as growth breaks higher to +0.43 and liquidity digs further negative to -0.13. The real-assets sleeve came back online (VNQ + XLE), so cash reverted to its 25% base weight instead of the 55% its temporary unavailability had forced, simulated backtest stats improve to 17.0% CAGR / 1.26 Sharpe. DRAM emerges as the next AI bottleneck as South Korea intervenes on leveraged KOSPI ETFs, the US quietly helps Japan defend the yen through FIMA repo rather than Treasury sales, a hedge fund nearly blows up on an over-levered single-name AI bet, and gold's rally reads as a growth-and-money-supply story, not a Fed-credibility one.

ReflationPortfolioDRAMYen
August 2, 2026

Liquidity Flips, the Book Goes to Cash

The overlay flips to Reflation / Contracting as liquidity drops to -0.23. The August 1st tournament rebalance lands hard on cash. SGOV now carries 55% of the book after the real-assets sleeve came back unavailable. The Fed holds rates but Warsh's ambiguous press conference reads quietly dovish to us, NVIDIA's CDS spreads widen on capex-payback fears even as we think the market has the capex debate backwards, tariff headlines have stopped moving markets, and the AI trade's specialization era opens real room for cheaper Chinese models.

LiquidityContractingPortfolioFed
July 26, 2026

A Chip Demand Wall, a Grinding Oil War

Reflation / Expanding holds as growth firms to +0.41 and inflation cools to +0.13. The book carries its July weights into the August 1st rebalance. Kimi K3's runaway popularity runs into a demand wall: outages and closed signups that read as another bullish signal for semiconductor demand. Plus: the Iran conflict grinds on without escalating, Truth Social reportedly sells early access to market-moving posts, the chip pullback looks like a momentum air pocket, the LSE announces 24/5 trading, Japanese yields break out, Novo sues Lilly, and OpenAI refocuses on its core product.

ReflationGrowthSemiconductorsIran
July 19, 2026

The Ceasefire Breaks, Growth Breaks Out

Reflation / Expanding holds as growth snaps from +0.37 to +0.67 in its sharpest one-day jump in months. The book carries its July 1st weights unchanged. Iran breaks the ceasefire and the US launches fresh strikes alongside new curbs on Iran's oil exports, reopening the Hormuz tail risk with no truce left to fall back on. Plus: a softer CPI print revives the rate-cut case even as consensus still leans hikes, bank earnings lean on trading over lending, private credit hits redemption gates, and consumers rotate to cheaper Chinese AI.

HormuzGrowthReflationCPI
July 12, 2026

SpaceX Joins the Index, Iran Breaks the Truce

Growth posts its strongest print of the year at +0.73 as Reflation / Expanding holds. SpaceX's addition to the Nasdaq-100 puts it inside QQQ, one of the book's growth-sleeve holdings, right as Musk sentiment splits the market, a wave of buying meets a backlash into new "non-Elon" ETFs. Separately, Iran formally breaks off the peace framework, sending Brent sharply higher and reopening the oil-driven inflation tail risk.

GrowthReflationIranOil
July 5, 2026

The Book Turns Aggressive

Reflation / Expanding holds into the new month as inflation extends its slide to +0.14. The July 1st sleeve rebalance is the sharpest rotation since the five-sleeve model launched. Growth and liquidity sleeve weight roughly doubles to 25% each while defensive and cash are cut by more than half. May PCE confirms the cool-down. The Iran truce shows early cracks.

ReflationPortfolioPCEIran
June 28, 2026

Growth Cools, Liquidity Firms

A rare quiet week: Reflation / Expanding holds for a second week as growth eases to +0.31 after its post-FOMC run and liquidity firms to +0.23. No fresh Hormuz scare, no Fed surprises, just a market digesting Warsh's hawkish dot plot ahead of the June PCE print. The book carries its June weights into month-end.

ReflationLiquidityQuiet Week
June 21, 2026

The Engine Gets an Upgrade

Reflation / Expanding holds as liquidity firms and inflation stays flat. Warsh chairs his first FOMC (a unanimous hold wrapped in a hawkish dot plot that now implies hikes) while a fragile Iran peace is undercut by a renewed Hormuz threat. Plus: this week we shipped the largest model upgrade since launch: a five-sleeve momentum tournament, a new collateral & funding liquidity pillar, and a hysteresis-based classifier.

System UpdateFOMCReflationHormuz
June 14, 2026

4.2%, and a Path to Peace

May CPI prints a three-year-high 4.2%, but it's almost entirely energy, with core at 2.9% and shelter cooling, so the inflation composite has already rolled toward zero. Reflation / Expanding strengthens as liquidity firms, and mediators announce a framework to end the Iran conflict. All eyes on Warsh's first FOMC.

CPIReflationLiquidityOil
June 7, 2026

The Liquidity Upgrade

Liquidity confirms its flip to positive and the overlay turns Expanding for the first time since the energy shock. The regime is now Reflation / Expanding, the most constructive backdrop of the year. The book rotates: gold out of the defensive sleeve, base metals and healthcare in. The S&P prints a record above 7,600, then a sharp tech-led pullback.

LiquidityReflationRotationRecords
May 31, 2026

On the Cusp

Last week of Reflation / Contracting, but only just. Growth and inflation are steady while liquidity firms to the edge of the dead-band, one notch from flipping the overlay to Expanding. Equities press toward record highs on semiconductor leadership even with oil elevated. The month-start rebalance will catch the turn if it confirms.

LiquidityReflationRecords
May 24, 2026

The Warsh Era Begins

Reflation / Contracting holds a fourth week, but liquidity is quietly trying to turn, its first positive print in weeks, still inside the dead-band. Kevin Warsh is sworn in as Fed chair. The book is unchanged, anchored in real assets and gold, with the composite poised for a possible regime upgrade at month-end.

FedWarshReflationLiquidity
May 17, 2026

Growth at a Year-High

Reflation / Contracting for a third week, with growth pushing to a year-high +0.71. Kevin Warsh is confirmed Fed chair in a 54 to 45 vote, the closest in modern history, as Powell's term expires. April CPI confirms inflation is still accelerating. The book holds, by design.

FedWarshGrowthReflation
May 10, 2026

Reflation Entrenches

Reflation / Contracting holds for a second week and firms up. Inflation rising while growth stays strong and liquidity hovers just below zero. The book is unchanged, anchored in commodities, energy, gold, and a fat cash sleeve. Attention turns to next week's Warsh confirmation vote and the April CPI print.

ReflationInflationOil
May 3, 2026

The Regime Flips

The energy shock finally broadens through the inflation composite, moving the regime out of Goldilocks and into Reflation. A divided Fed holds rates in an 8 to 4 vote, the most dissents since 1992. The portfolio rotates hard toward real assets, gold, and cash.

RegimeReflationFOMCReal Assets
April 26, 2026

Strong Growth, Draining Liquidity

Growth is the strongest all year and inflation is still near zero, so the regime stays Goldilocks, but liquidity has slipped negative, flipping the overlay to Contracting. Brent tops $108 as US-Iran talks unravel and the Strait of Hormuz stays shut. The Fed meets next week.

GoldilocksLiquidityOilFOMC
April 19, 2026

Growth Leads, Liquidity Lags

Growth is at a cycle high while inflation sits on the zero line and liquidity stays mildly negative. Goldilocks / Contracting holds. Markets have stopped reacting to the Iran headlines, the S&P is recovering off its lows, and the April Fed net liquidity drain is a tax-week pattern, not a signal. The FOMC is up next week.

GoldilocksLiquidityFed
April 12, 2026

Two Thresholds at Once

Growth keeps strengthening while inflation sits exactly on zero and liquidity remains negative, Goldilocks / Contracting, with the regime balanced on two thresholds at once. The book is the risk-on allocation carried from the April rebalance. The US-Iran conflict dominates the tape, but the tail risk looks largely priced.

GoldilocksRegimeLiquidity
April 5, 2026

The Overlay Turns

Growth firms even as the jobs and ISM data soften (the composite is carried by the AI capex and distribution pillars) and inflation stays below trend, keeping the regime in Goldilocks. But liquidity crosses below zero, flipping the overlay to Contracting. The book carries its risk-on weights until the May rebalance.

GoldilocksLiquidityJobs
March 29, 2026

Goldilocks Holds

A fourth straight week of Goldilocks / Expanding. ISM manufacturing slips back into contraction and core PCE runs a touch hot, but the inflation composite stays negative as the energy shock stays narrow, and liquidity keeps expanding. The book stays risk-on and globally tilted.

GoldilocksGrowthInflation
March 22, 2026

Hawkish Fed, Narrow Inflation

The FOMC holds and delivers a hawkish dot plot (one cut penciled for 2026) and Brent settles near $101 on Red Sea disruption. Yet the framework still reads Goldilocks / Expanding: the energy spike isn't broadening, so inflation stays negative and liquidity keeps expanding. The book remains risk-on.

FOMCGoldilocksInflation
March 15, 2026

Goldilocks Through the War

With US and Israeli forces at war with Iran and the Strait of Hormuz disrupted, the instinct is to brace for stagflation, but the data reads Goldilocks / Expanding. The energy spike is isolated in one channel while demand and services stay disinflationary, growth is modestly positive, and liquidity is expanding. The book is risk-on, not hiding in cash.

GoldilocksGrowthLiquidityIran

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