First Principles with Andy Constan Sep 19, 2026 59m 34m saved
With Andy Constan, Founder and Chief Investment Officer of Damped Spring Advisors
Inflation has now run above the Federal Reserve's target for 66 months by Andy Constan's count, and this week the Fed raised interest rates for the first time since 2023.
Most of the commentary treated the increase as the Fed rediscovering its nerve. Constan said it did nothing of the sort: the move only matched what the bond market had already priced, and rate rises of that size barely touch the asset prices that are funding consumer spending in the first place.
"So I think what has to happen is asset prices have to fall."
Constan, Founder and Chief Investment Officer of Damped Spring Advisors, on First Principles, sells macro research to hedge funds, has spent close to four decades making markets and running money, and started the firm in 2019 to publish what he had previously traded on.
The full interview is covered here so you can skip it. 59 minutes of audio, 25 minutes of reading.
Here are the 16 arguments that matter.
Key Takeaways
Inflation comes down only when asset prices fall, and small rate rises do not move asset prices
He says balance-sheet and fiscal policy are what can move long-term asset prices, not a 25 basis point hike
The hike matched what the market had already priced and so built no credibility at all
The committee had three dissents going in, and he says the bond market is another 50 basis points more hawkish than the dot plot
Credibility is built from deeds, not words — holding rates while stocks fall 10% and employment worsens is a deed
Treasury buybacks are stimulative but small, worth about 5 or 10 basis points at the outside
He says the intent is plainly to suppress long-term rates, which works against the Fed's own inflation target
10-year notes now offer roughly a 0.17 Sharpe ratio against cash, which he calls not great but far better than 2020
Bonds are worth owning again because they can rally when equities fall, which was impossible at a 65 basis point yield
He runs equities plus bonds at 1.25 to 1.5 times leverage rather than 100% equities
Japan went from uninvestable to investable when its bond yields rose, not because its stocks got cheaper
He is buying Japanese stocks and bonds together against US stocks and bonds, not Japanese stocks against US stocks
An AI capex slowdown is bearish for stocks on net, even though it would cut the corporate bond issuance weighing on them
The midterms do not matter, and he says there is no configuration of the result that changes policy
1. Dissaving Funds Spending
Asked how to make sense of a week that carried a Fed hike, a 10-year Treasury yield above 5% and oil over $100 a barrel, Constan started with the economy rather than the market. Two things are holding demand up: the consumer, and spending on equipment for the computing build-out.
Consumption is being paid for out of assets and credit, not wages
Consumers are not experiencing significant wage growth, they're not seeing real wage growth, so most of their consumption is being funded by dissaving and borrowing.
Andy Constan
High asset prices are what make that cheap. A household that sells something that has appreciated, or borrows against it, is spending without earning more, and Constan said elevated prices make both easy.
The labor market looks strong for an unusual reason. He said he does not see much demand for labor, but there is not much supply either, because immigration policy has flattened growth in the labor force. People are staying in their jobs and quits are not rising.
Workers have no leverage because of what might replace them
They don't have much leverage to demand wage increases, despite a relatively strong economy, because they're being threatened by being replaced by AI.
Andy Constan
Against that, higher energy prices are taking a bite. He lives in a rural community with no natural gas line and said his heating oil bill is going up two and a half times this winter. Natural gas has held up better, he said, because the US neither imports nor heavily refines it, so rural households on oil will feel the winter harder than they feel the price at the pump. Diesel and other commodities take more out of both consumer and corporate budgets.
He is not the one who will struggle with it
But at the same time, I don't think I consume much more oil than anybody else, and so there are a lot of people that can afford oil less, and they're gonna struggle.
Andy Constan
Demand is still strong on the whole, he said, and inflation has stayed elevated with it. The last few months showed some progress toward target; the most recent month reversed part of it.
2. Warsh Painted Into A Corner
Constan had called the hike a no-brainer in advance and was asked to explain why. His answer was about what Chairman Warsh had already said in public.
Warsh has spoken only at his confirmation testimonies, at FOMC meetings and at Jackson Hole, and is not a fan of forward guidance. What he did do, Constan said, was position himself unambiguously as an inflation fighter.
Declaring yourself an inflation fighter removes your options
And when you do that, you paint yourself into a corner when data comes in hot.
Andy Constan
The committee was already leaning toward a hike with three dissents. Not hiking carried a cost.
The bond market and the dollar were the constraint
the consequences of not hiking were fairly dire regarding the dollar and the bond market, the long-term bond market, which I think would have thrown a hissy fit.
Andy Constan
Constan noted that the president has been attacking Powell despite Powell having cut rates by 125 basis points from the day after the election onward, and that Warsh went the other way. He said he does not know whether Warsh is acting in the administration's interest, but that if he were, hiking now is exactly what he would do: it buys the credibility to cut later, and nothing about current conditions is dire. Equities are strong and, in his words, everything the president likes is going great.
He also said he assumes Treasury Secretary Bessent told Warsh that bonds would react badly to no hike. The president's own explanation, that Warsh hiked because the committee was against him, undercuts Warsh as a leader.
The conditions were as good as they get
Perfect time to hike. It was a no-brainer, and they did.
Andy Constan
3. Credibility Comes From Deeds
Asked whether the hike was therefore good for Warsh's credibility, Constan said no, three times, before qualifying it. It was not a disaster for his credibility. He just matched the market.
Matching the market is not a credible act
That's hard to say, "Oh boy, well, that was a credible thing to do." He matched the market.
Andy Constan
The projections back that up, he said. The committee's own dot plot is not Warsh's dots, but even so it points to very little further tightening, and the market is already ahead of it.
The dot plot was never going to out-hawk the market
even the dot plot suggested interest rates are only gonna go up another 25 basis points this year and are gonna stay flat at 4.125 mid for the balance of 2027. The bond market's already another 50 basis points more hawkish than that.
Andy Constan
One of the hosts asked where the dot plot comes from if the chairman gives no forward guidance. Constan explained that it is the other 18 members saying where they think the economy and rates are going, and that governors and presidents are still free to say what they like. He singled out Waller, who he said does not think forward guidance that sets future rates is needed now but does think communication remains an important part of the job.
That argument is heading to one of Warsh's five task forces, and Constan said the outcome is not in doubt in one respect: whatever the task force concludes, communication will change, and there will be less of it. He said it is impossible to believe that a chairman appoints senior people to five task forces and the answer comes back that the Fed had it roughly right.
Pressed on how much credibility is worth on its own, he gave the test.
Credibility is a record of actions, not statements
So I think credibility is built from deeds, not words.
Andy Constan
Hiking into a strong stock market and high inflation does not build it, he said. Hiking or holding while stocks and employment deteriorate, and sticking with it until inflation is dead, does. Without an action that actually brings inflation back to target, by design or by luck, he said there is no route to greater credibility.
One of the hosts put it back to him that markets have been trained to expect officials to back down the moment consequences arrive, which is why the extra step is needed. Constan agreed and widened it: the long-run story of central banks is a degradation of credibility, and that degradation is what has favored hard assets, built a cottage industry in crypto and alternative hard assets like Bitcoin, produced bond markets that need policymakers to hold yields down, and normalized tolerance of high inflation.
Asked whether the line about getting inflation to 2% clearly and at sufficient speed counted as forward guidance, he was dismissive.
He does not grade statements
Those are good words. Good words. He's using words. Those are words.
Andy Constan
What would count instead
Maintain interest rates or hike when the stock market's down 10% and employment is worsening, that's how you build credibility.
Andy Constan
4. Asset Prices Have To Fall
This is the argument the episode is named for. Constan was asked whether a long hiking cycle is needed, and said he does not know what is needed, but he knows what would work.
The chain runs from asset prices to demand to inflation
I think inflation is too high and needs to come down, and I think what does that is hitting demand, and I think what supports demand, in this economy, is high asset prices. So I think what has to happen is asset prices have to fall.
Andy Constan
Modest increases in short-term rates do not change asset prices much, he said. Balance-sheet policy and fiscal policy can move long-term asset prices, and that is what it would take, short of good fortune or disinflation arriving from AI — which he said is unlikely, because AI is inflationary now.
The practical consequence is that long-term bond yields probably stay high for longer. He referred back to his own framework of islands, one for each regime a market can sit on, and said the higher-for-longer island has gained residents: the market is now pricing 75 basis points of future hikes.
5. Bessent's Buyback Play
Asked what to watch on the balance sheet, Constan said the minutes will discuss it but the formal answer waits on another of the five task forces, and that the odds the task force has already met and reported are very low. He does not know how Warsh plans to disclose the five outcomes, whether at an off-cycle meeting or a closed-door one, or how he will get the committee to absorb them.
Meanwhile the Treasury is pulling the other way.
The Treasury is buying back more bonds than it said it would
The Treasury officials are doing the opposite — they're trying to suppress long-term interest rates by increasing their buybacks. They doubled them.
Andy Constan
He said they ended up at two and a half times on their first buyback at the new size, and that he had not checked the most recent operation. A new issuance and buyback plan lands on November 5, the Wednesday after the election.
His view before the last quarterly refunding was that the deficits and the debt made it inevitable that the Treasury would have to increase the amount of long-dated debt the private sector absorbs. Then the refunding statement used language about changing rather than increasing, which muddied it, and the buyback made the direction clear: they want to reduce it. He expects the market going into November 5 to price ongoing buybacks of meaningful size plus cuts to 10-, 20- and 30-year coupon auctions.
He expects Bessent to do what Bessent criticized
Right now, I think everyone expects Bessent to pursue the thing he absolutely criticized the prior administration for, and use activist Treasury issuance to suppress long-term interest rates. I think that's the expectation. I think he's gonna do it. He shouldn't, but I think he's gonna do it.
Andy Constan
The open question is whether it lands bigger or smaller than the market expects — or whether the Treasury cancels the buybacks and increases issuance instead. Constan said he does not expect that, though he allowed that it is after the election, so maybe.
6. What Buybacks Actually Buy
One of the hosts noted that the policy has been widely criticized, including by Druckenmiller, "or at least Druckenmiller's AI". Constan separated intent from effect. Nobody doubts the intent, and he said he has seen no one argue it is anything other than an attempt to hold long-term rates down.
The intent is worth criticizing if inflation is still a problem, because suppressing rates is stimulative, stimulus supports growth, and growth is what politicians want. He said it is not surprising an administration does this; it is simply not its job.
Then he did the arithmetic out loud. These are his own figures, delivered at speed.
The size of what the market has to absorb
We issue $928 billion of coupon auctions per year — that is what the Treasury market has to absorb.
Andy Constan
The average maturity of that issuance is closer to six years, he said. There are 32 buybacks a year in the relevant maturity bucket; the size of each has gone up by roughly $2.5 billion to $3 billion, from the $2 billion operations that were running at about $64 billion a year, which adds something like $75 billion to $100 billion of buying.
A hundred billion moves rates by a rounding error
100 billion of marginal demand for Treasuries, or reduction in supply of Treasuries, taking bonds away from the private sector, is good for like 5 or 10 basis points max.
Andy Constan
The reason is that supply and demand is not the big driver of yields, he said. Growth expectations and inflation expectations are what move rates by 25 or 50 basis points, and the way to size a supply effect is to look back at what QE and QT actually did.
So the policy is a small factor, but not nothing — and that is the point. It is stimulative, which puts the Treasury at cross-purposes with what 18 of the 19 FOMC members appear to be trying to do.
7. How A Hike Pulls The Curve
One of the hosts said the Twitter debate going into the meeting split two ways: a hike must push long-term rates up, or a hike shows seriousness about inflation and therefore pulls them down. Constan said both are real and they work through different channels.
The mechanical channel is arithmetic. Raise the funds rate 25 basis points and a one-week Treasury bill yield goes up 25 basis points, because a buyer can otherwise get the new rate in repo. One-month bills move about as much; one-year bills move less. What is already priced matters — if everyone trading one-year bills expected the hike, nothing changes at all.
The curve behaves like a string being pulled at one end
if you're looking at a string, and the string is 30-year bonds over here and T-bills over here, a 25 basis point hike pulls that part of the string, and the whole string gets pulled less and less as you go through time.
Andy Constan
The economic channel runs the other way. If the hike lowers inflation and slows growth, both real rates and inflation breakevens on the 10-year fall, pushing long-term yields down while the front end is pulled up.
In this case the market had already priced 100 basis points of hikes. Two-year yields rose a few basis points, which he said could have been the mechanical pull; 10-year yields fell slightly, which could have been the growth and inflation effect. He was careful that this is how the pieces work rather than a claim about what happened, since the curve ultimately depends on how those forces land against expectations.
8. A 0.17 Sharpe For Bonds
The hosts turned to Constan's Damped Spring piece "The 60/40 Strikes Back," which sets out four conditions that have to hold before long-term bonds are worth owning, and worked through them one at a time. The first is whether bonds pay enough over cash.
Risk premiums cannot be observed, he said, only modeled. One crude version is the gap between the 10-year yield and the funds rate, which he put at about 75 basis points and said is higher than it has been.
Then came the history, and these are his own figures, given rapid-fire.
The bull market that ran from 1982 to September 2020 was a bubble
during that period of time, nominal yields fell from 16% to 65 basis points on the 10-year. Term premium, this risk premium thing, went from solidly 2% plus to negative 50 basis points. That was a bond bubble.
Andy Constan
Suppose a 10-year note is priced to return 100 basis points more than cash over its life. That is better than negative 50. Is it adequate? He measured it against the volatility.
The risk-adjusted number is modest but positive
That's one divided by six, it's a 0.17 Sharpe ratio.
Andy Constan
Daily price volatility on 10-year notes is about 6% a year, he said, against 100 basis points of excess return. A 0.17 Sharpe ratio is not good, and it has been double that. But it beats what bonds offered in the summer of 2020, which was a negative Sharpe ratio.
He added that over a very long window the asset has held up better than people assume. Holding bonds from 1973 through the inflation spike and the 40-year bull market that followed has been good on a risk-adjusted basis relative to equities.
The last five years are why nobody wants them
But holding them since the bond bubble popped has been a disaster.
Andy Constan
9. 3% Real Vs 5% Growth
The second condition is whether the real yield compensates you against growth assets or against simply spending the money. Here Constan said the short-term picture argues against bonds and the long-term picture argues for them.
Current growth makes a 3% real yield look poor
So if that persists, nobody wants to own real Treasuries at 3% yield when you're growing at 5%.
Andy Constan
The 5% is this quarter's GDPNow estimate of real annual growth, which he put at 5.1%. Most long-term growth outlooks sit closer to 2%, which he called fairly favorable for a 3% real yield. Buying bonds here is a bet that short-term growth is overstated relative to long-term growth.
He framed the appeal in terms of what else is on offer: many markets are priced for very strong growth, so owning something at a reasonable real yield in case that growth does not arrive is attractive.
10. Thin Inflation Cover
The third condition is whether bonds carry enough inflation compensation to offset realized inflation, and it is the one he said bonds fail.
Breakevens do not pay you much
Inflation expectations are basically between 2 and 2.5%, depending on where you are on the curve, depending on how you measure it, what inflation you're talking about.
Andy Constan
That is a concern if inflation reignites, he said. The only reason to be comfortable is if you believe the Fed intends to get inflation back to target, and he said many people do not believe that, though he thinks the Fed is trying.
The bond case depends on the Fed doing its job
It won't work if they don't, so that'll be a drag on bonds if the Fed continues to fail at its job.
Andy Constan
11. Bonds As The Equity Hedge
The fourth condition is the one he called the big thing: whether bonds can rise enough when growth and inflation come in weak to let you hold more equities than you otherwise would.
He acknowledged the case against. Investors look at their portfolios and ask why they would ever own bonds, because equities go up — and he said they do, over the long term, they really do. Anyone who bought a 60/40 portfolio on advice in 2020 is cursing bonds with good reason.
The reason is that capital appreciation was arithmetically unavailable. At a 65 basis point yield on the 10-year there was nowhere for the price to go. Capital appreciation on bonds happens when the economy turns down, when growth undershoots and inflation falls below expectations — and in the summer of 2020 there was no room for it.
Now there is room, and you will need it
Today, interest rates fall from 5 to 4%, which they easily could — they could fall to 3% — you're gonna have substantial capital appreciation in a bond portfolio, and you're going to need it, because equities are gonna fall.
Andy Constan
That changes how much equity exposure is safe to carry.
Bonds let him hold more stock, not less
So you wanna own bonds when they have a chance in heck of being a diversifier to a long equity portfolio, and today they absolutely do.
Andy Constan
The construction he actually runs
if I'm gonna take S&P-like risk, I'd rather own quite a bit of equities but also some bonds so that I have S&P-like risk in the portfolio, which requires a modest amount of leverage, one and a quarter, one and a half times.
Andy Constan
Run that way instead of a 100% equity portfolio, he said, the drawdown is smaller, the risk-adjusted return is higher, and the investor can hold equities through bad stretches. He pointed out that anyone holding bonds in 2020 did not feel the equity drawdown at all, during COVID, because the bond market was in a bubble.
The verdict on the four tests
A 60/40 portfolio goes from being worthless to being a much better formulation than pure equities.
Andy Constan
He was explicit that not all four conditions are met, since inflation expectations are the failure, but that most of them are, which is enough.
12. Pick The Risk Target First
One of the hosts noted that Constan compares bonds and stocks at equal risk rather than at equal dollars, which makes bond returns since the 1970s look much better than the usual comparison. Constan agreed and used it to make a point about position sizing rather than about bonds.
What he cares about is that total portfolio risk matches his own tolerance. He said he does not mind investors who take regular 20% drawdowns and whose portfolios move 2% or 3% in a day; they will earn more than he does, and that is fine. He is more conservative.
The failure mode is holding risk you cannot sit through
What I do mind is when somebody has more risk than they know what to do about, because that's when they panic, when they either through leverage or through just not tolerating the drawdowns, close out their positions at the wrong possible time.
Andy Constan
You have to be willing to sit close to the edge of that discomfort, he said, or you will never make money, because tail events cannot be engineered out of investing. What a drawdown must not do is change your life. If a loss would radically change it, the position is too big.
Choosing the risk target is the essential step; building a portfolio that hits it is tricky but doable. Only then does the question of what to own arise, and his answer now includes some bonds — along with commodities and gold, which he holds alongside stocks.
13. AI Capex Needs Issuance
The second host asked how corporate issuance looks now that the Fed meeting is out of the way, noting the reports of Anthropic talking about a safety slowdown and the argument over whether that is a genuine safety concern or has other motives behind it.
Constan set the Anthropic story aside and said the issuance is arriving regardless. Companies are buying back less stock and issuing more of it, because the capex expectations are huge and have to be funded.
Funding the build-out is what creates the supply
If you believe the capex story, it needs to have issuance.
Andy Constan
If the capex story slows, whether through a voluntary pause, a regulatory brake or simply a decision to spend less quickly, that hits earnings expectations. As with government bonds, QE and QT, he said the issuance is a small factor next to changes in earnings expectations.
The two effects do not cancel
So a slowdown is bearish stocks and bullish bonds, frankly — bearish stocks, full stop.
Andy Constan
A slowdown does reduce how much has to be funded, which removes a headwind, but netted against the earnings hit it is still bearish. And the other branch is no better: if capex grows as expected and the companies meet rather than beat expectations, the issuance is a net headwind, because meeting expectations is already priced. Unless the growth of earnings expectations accelerates beyond what is priced, he said, the issuance cannot be overcome.
14. Japan Became Investable
Constan said Japan is now his favorite market for beta, after years of avoiding it. The change had nothing to do with Japanese equities.
His test for a country is four-part: an attractive bond market, an attractive stock market, pro-growth fiscal policy, and monetary policy that is easy and likely to stay easy. Japan failed the first for as long as he can remember.
A broken bond market disqualifies the whole country
So they eliminate the possibility of making Japan as a country investable, full stop.
Andy Constan
Two things follow from an uninvestable bond market, he said. The currency is likely to depreciate, so you do not want to own it. And the stock market underperforms, because nobody will size up a position in Japanese equities when there is no domestic bond market to hedge a growth slowdown with. The same argument applied to Europe, less extremely.
That changed. Japanese yields are now investable — not as good as the US, he said, but far better than they were, and good enough that he wants to own Japanese stocks. The shift happened around the inauguration, when bond yields in Japan and Europe backed up on the recognition that the US would demand more investment, capex and military spending from allies. Equities took off, and currencies took off harder.
The developed-market ETF has run away from the S&P
And man, that thing has doubled the return of the S&P over the course of the last — since inauguration — and so that's been great.
Andy Constan
He was referring to VEA, the developed-market ex-US fund one of the hosts raised, after Constan named it himself as the clean way to look at the trade. The bond side has been worse, since Japanese and European bonds have both underperformed, but the euro helped in Europe and the yen has been roughly sideways, so the combined stock-and-bond return in dollars is competitive with the US.
That, he said, points to some repatriation out of US assets into home markets, and to US investors finally having a reason to look abroad after years of not having one. Adding valuations to the picture: Japan carries real technology exposure, more than Europe though less than the US, and its valuations have been flat for years while the entire S&P sits on the elevated side. Fiscal policy is expansionary and monetary policy is easy, which hurts the currency a little, but he thinks capital flows are enough to appreciate it anyway.
So he went from owning no foreign assets before the inauguration to a beta portfolio of bonds and stocks weighted by GDP, and is now looking for the chance to overweight Japan.
One of the hosts raised the corporate governance reforms pushing Japanese companies to return capital through dividends and buybacks. Constan said fundamentals are not his game. What he would say is that Japanese risk parity and the Japanese stock market have both been long-run underperformers, and that the market is up about 70% over two years but is catching up rather than surpassing.
The trade is paired, and the pairing is the point
I'm advocating buying Japanese stocks and bonds over US stocks and bonds, and that's the key difference.
Andy Constan
15. The Midterms Don't Matter
Asked what he is watching over the next month with the midterms approaching, Constan said he had written a research note and published a chart of the last 14 midterms, and that they do not matter — this one especially.
What would matter is an outcome that either unleashes or caps presidential power. Unleashing it would need the House to stay Republican, which he said is not what anyone expects, and a Senate red enough to reach the 60 votes required to legislate freely. He sees no plausible path to that, so the result is some form of gridlock.
Nor can the result take much power away, because there is little left to take.
One bill in the whole term
The only thing he's successfully legislated, literally the only thing, is the OBBB, which is over a year and a — 13, 14 months, 15 months old. Nothing's been legislated ever since.
Andy Constan
Everything since has been executive action, he said, some of it inside the president's mandate and some of it declared illegal. The measures being floated to pump the economy before the vote are mostly talk. He allowed one exception he cannot construct: an outcome in which oil prices crater. He said he cannot see why Iran would hand the president that win now rather than waiting until after the midterms, though he conceded that might be a failure of imagination on his part. Tariffs and trade, he said, no longer move the ball.
The downside case is a Democratic sweep of the House followed by impeachment proceedings, which he said would amount to nothing because the president will not be removed, and would be noise on top of gridlock.
What he is watching instead
What matters is what happens in Iran, what happens to the funding of capex, how long that persists, and does the capex pay off? Whether the Fed will do anything about inflation.
Andy Constan
After the midterms, he said, it comes down to those things plus what Bessent does to suppress long-term yields.
16. Beta Is The Free Money
One of the hosts summed up the bond and Japan calls as the same move: neither is a screaming buy, both went from uninvestable to investable, so both now get a place in a broad set of betas. Constan agreed and explained why he always holds beta.
Owning assets for life is the one reliable edge
My view is that free money in markets is owning and holding assets for life.
Andy Constan
The mechanism is that anyone asking for your money, whether through equities, bonds, long-dated commodities or credit, has to offer a return to compete for it. Sometimes that premium is thin, as in 2020 when there was a savings surplus. Most of the time it is comfortably positive and beats cash and inflation.
He was generous about the alternative. Someone who keeps a US 60/40, or owns no bonds, or ignores everything he said, and simply holds a portfolio at a risk level they are comfortable with, will do fine.
More assets, so the portfolio works in more conditions
And in that case, you wanna own more things, more diversification across conditions, so that in aggregate you win in all weathers.
Andy Constan
Bonus Insights
One of the hosts lost money on the same trade Constan described
He said he had held off on his last heating oil delivery in late winter expecting prices to fall, and that it backfired.
Constan does not know how the Fed will publish its five task force findings
He said the odds that the task force has already met the committee and delivered findings are very low, and that if they did meet during the FOMC cycle it will show up in the minutes.
The criticism of activist Treasury issuance has come from one of the best-known names in macro
One of the hosts noted that Druckenmiller had come out against it — "or at least Druckenmiller's AI was against it."
Andy Constan's bottom line
Inflation stays above target until demand is hit, demand does not weaken while asset prices are high, and no 25 basis point move changes that — so he owns bonds not because he is bullish on them but because they are finally able to pay him when the stocks he owns fall.
Products, Companies & Tools Mentioned
Damped Spring Advisors (Constan's own firm, which publishes the macro research and the island framework he referred to for classifying market regimes)
The US Treasury (Running buybacks he says are meant to suppress long-term yields, with the next issuance plan due November 5)
The Federal Reserve (Hiked for the first time since 2023; Constan says it matched the market rather than leading it, and that five task forces will change how it communicates)
VEA (Vanguard's developed-markets ex-US ETF, which he says has doubled the S&P's return since the inauguration)
Anthropic (The reported AI safety slowdown one of the hosts raised; Constan set it aside and said capex funding needs continue regardless)
Bitcoin (Named as part of the cottage industry in alternative hard assets that he says central bank credibility loss has created)
Books & Resources Mentioned
The Case for adding bonds - The 60/40 Strikes Back – Andy Constan (The Damped Spring piece the hosts worked through, setting out the four conditions a long-term bond has to meet before it belongs in a portfolio)
The Damped Spring Substack (Where the above piece and the research note on the last 14 midterms were published)
GDPNow (The Atlanta Fed's running estimate of real GDP growth, which he put at 5.1% annualized for the current quarter)
The Treasury's quarterly refunding (The announcement whose language on issuance he read as a signal, with the next one due November 5)
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