Slowing But Growing: Why The U.S. Isn’t Headed For Recession | Prometheus Research
Episode publishedPodcast: Forward GuidanceForward Guidance
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Welcome back to another episode of Ford Guidance. And joining me today is repeat guest, Ahon of Prometheus Macro. He was here a year ago, and it's great to have him back. What's going on?
Hey, Felix. Good to be on, and, nice to meet you live first time. Yeah.
Totally. I've been a really big fan of your work and your process, and, you know, you have some of the best, macro chart decks in in the game. So this is gonna be a chart deck heavy episode. So, you know, if you're watching on audio, definitely recommend switching over to video because there's gonna be some great stuff in here. But sweet. Let's get into it. I wanna start off by just understanding your framework, how you approach macro, how you developed Prometheus, and this, you know, more systematic macro process that you are a big proponent of, versus say discretionary?
Yeah. For sure. There's a lot to kind of digest around that. So I think why systematic is a good starting point and then how we do the systematic is, nuance specific to us. But, like, why why systematic is basically a decision about having views on how the world works and how you can generate you can generate alpha or excess returns over beta or cash, using those views. Now at any point in time, everyone has views on any particular subject like bonds, the economy, stocks, credit markets, things like that. But to really develop an understanding of whether those views have positive outcomes and
Okay. Cool. Well, let's dive into that macro picture. Like I said, you have a stacked deck here today to to walk through with us. Yeah. So, you know, let's start with your perspective on growth and and GDP. You're on a pretty sophisticated GDP NowCast model. So maybe we can just start with that, and then we can go into some of those high level perspectives there at the beginning. But, you know, we'd love to just hear about what you're looking at in terms of growth here.
You know, just to start off with with with GDP, I think GDP gets a lot of hate. And I but, you know, and the reason it gets a lot of hate is because, I think it's part like, you know, I think it's partially like a little bit of a superficial understanding of, like, what what's happening. But the the hit around GDP is basically that it's a lagging indicator and the data is super lagging and you can't do anything with it. Right? And there are a variety of reasons why that doesn't necessarily make sense, but I think the the the simplest thing that we can do is we can take all of the individual co
And this is sort of what happened in, like, 2022, right, is where we had those negative real GDP prints mostly because of how negative net exports was. Right? Yeah.
Exactly. Exactly. So, you know, when you basically have a situation where the other parts of GDP are compressed, then the trade parts start to really express themselves. But really, when you look what's super interesting is that, you know, trade trade components just tend to actually reflect what's happening with the goods economy, both, you know, internationally and domestically. So on a standalone basis, they tend to be good indicators, but once you net them out to the actual effect of GDP, they're not actually that meaningful unless you have a really subdued, you know, domestic sector. So w
And just to be super clear for the listeners is that this is, like, your your GDP now cast. Like, this is coincident deleting. It's not the lagging GDP numbers from a quarter ago. This is right here right now. And I know you're you're you're fairly proprietary in your your data meth methodologies and everything, but, you kno
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