Economic Déjà Vu: The Fallout of a Tariff-Driven Trade War

Israel–Iran War Headlines: Great for Clicks, Lousy for Timing

• Israel’s formal declaration of war on Iran and Washington’s call for Tehran’s “unconditional surrender” have lit up every newsfeed.
• Oil and the dollar jumped as expected—but Treasuries didn’t rally; yields rose on inflation fears. Equities dipped, then refocused on the Fed. Gold popped, then faded into the FOMC meeting. Bitcoin merely coughed.

Bottom line: Most of the “news” was priced in before retail investors could act. History shows knee-jerk trades in geopolitics are usually wrong-footed.

Why Geopolitics Feels Tradable—and Usually Isn’t

Investor rule: Watch, don’t chase. The S&P 500 typically recovers within six months of major geopolitical events.

Portfolio Discipline > “Fast Money”

• Binary outcomes, unknown timing, sentiment whiplash: the odds are stacked against headline traders.
• Missing the rebound is costlier than riding out a drawdown. A handful of big up-days drives most long-term equity returns.

Instead:

• Rebalance, harvest tax losses, stick to process.
• Never be afraid to sell winners because you fear taxes, but sell in non-taxable accounts to rebalance if possible.
• Diversify across assets that don’t move in lockstep—and stop watching every tick.

Fed Day: Powell’s Tightrope

• Dot plot says “higher for longer,” but the market still prices two cuts starting in September.
• Soft retail sales and CPI argue for easing; $75 oil argues against.
• Powell, in a potential final year, doesn’t want to be Arthur Burns or Paul Volcker.
• New Fed chair nomination being discussed.
• Candidate will likely support a higher inflation target—maybe 3%—and be open to lower rates.

Trade idea: Stay neutral duration (i.e., don’t structure your portfolio to bet on a rise or fall in rates); use options to express views around the September FOMC (so you just lose premium if you’re wrong).

Submarines vs. the Grid: The Labour Shortage No One Priced

• Pentagon may scrap a Virginia-class sub sale to Australia because it can’t find enough welders—those workers are needed to harden the U.S. power grid.
• Coding won’t fix a welding shortfall; chronic skilled-trade gaps are the new supply-chain risk.
• These are the “big moves” worth watching for shaping strategy.

Senate Tweaks to the “One Big Beautiful Bill”

• Still in flux, but early language paring back House's sledgehammer.
• Tighter construction deadlines for qualifying projects
• Sunset clauses that could eliminate certain credits by 2028
• Rollback of tech-neutral clean energy support, including nuclear and geothermal, for foreign-related entity involvement
• Carve-outs for energy storage
• Quick sunset of credit support for hydrogen and EV vehicles and chargers
• And a controversial 10-year ban on state-level AI regulations, tied to funding
• Senate softened the House bill in some ways, tightened it in others (45Z— extended eligibility period but no negative emissions rate)
• Lots of room to negotiate still, but the path is narrowing.

Another take. I am ambivalent about Alex Epstein because he is a little too convinced and a lot strident:

Market Tape

MacroMashup Playbook

1. Resilience over reaction – Stick to strategic weights; trim into strength, add on overshoots.
2. Watch skilled-labor bottlenecks – They’re the next supply-chain inflation driver.
3. Geopolitics ≠ Investment Thesis – Use it for risk scenarios, not trade triggers.

Enjoyed this newsletter? Get Involved.

• Subscribe to MacroMashup: one email a week, zero noise.
• Book a call with Dakota Ridge Capital if you’re investing in clean energy or want to optimize for tax strategy
• Watch us on YouTube, or tune in via Spotify / Apple
• Collaborate with us at contact@macromashup.com

📤 Enjoyed this? Share it via LinkedIn, repost on X → here, or forward it via email.

‍

Policy Paralysis or Calm Before the Storm? Markets Watch the Senate, Warily

Washington’s back in session and markets couldn’t be more bored. The Senate’s version of the One Big, Beautiful Bill trades blunt force for precision, thanks in part to Parliamentarian McDonough’s “Byrd Bath” rules, which require every provision to speak strictly to budget reconciliation. Her rulings may ultimately shape the bill more than party leaders themselves.

Senate Priorities Amid Los Angeles Unrest

With thousands of National Guard troops and Marines deployed to quell nationwide protests in Los Angeles sparked by aggressive federal ICE raids, the Senate is fast-tracking two controversial measures in the reconciliation framework:

• Medicaid for undocumented immigrants is being stripped from the package—cleanly excised under pressure to align the bill with budget reconciliation rules.
  
• ICE recruiter incentives are heading in the opposite direction: U.S. agents will receive $10,000 bonuses for meeting enforcement targets—an effort to bolster staffing amid rising political unrest.
  

Clean Energy in Limbo: Senate Holds the Balance

The clean-energy portion of the One Big Beautiful Bill hangs by a thread as the Senate prepares its version. The House’s version would sharply curtail key Inflation Reduction Act (IRA) credits—pulling IRA clean-credits like 45Y and 48E unless projects begin construction in 60 days and are completed by 2028, while slashing residential and tech-neutral incentives.

That rollback triggered swift backlash: bipartisan senators led by Utah’s John Curtis are urging relief—advocating phased timelines, credit transferability, and preserving support for nuclear and geothermal—even as fossil-fuel friendly Republicans push methane fee reductions.

Major tech players (Microsoft, Google, AWS, Meta) are lobbying to save clean-power credits critical for AI data centers. Meanwhile, over 175 mayors and local leaders cautioned the Senate that axing these incentives could jeopardize jobs, raise energy costs, and stall $14 bn in projects already planned.

Bottom line: Without Senate amendments—targeting start-date flexibility, rescued transferability, and maybe foreign-entity sourcing fixes—the clean-energy agenda risks collapse. And that means more policy paralysis, not progress.

Empire Wind Approved—Pipelines Quietly Resurface

In a quiet but telling trade-off, New York Governor Kathy Hochul has signed off on the long-delayed Empire Wind offshore project—a major win for clean energy advocates. But in the background, two previously blocked natural gas pipelines—Constitution and NESE—are now quietly advancing through state permitting channels.

Neither Albany nor Washington is calling it a deal, but the sequencing tells the story: offshore wind moves forward, and fossil fuel infrastructure gets a second wind.

The takeaway: In U.S. infrastructure, progress doesn’t always follow market signals—but political symmetry gets results.

U.S.–China Trade Talks Pivot to Swaps Over Sanctions

In a sharp departure from the tariff wars of years past, Washington and Beijing are quietly crafting a resource-for-access deal:

• China needs U.S. ethane to fuel its petrochemical and plastics industries.
  
• The U.S. needs Chinese rare earths for electric vehicles, wind turbines, and advanced defense systems.

The contours of the deal:

• China resumes rare earths exports.
  
• The U.S. loosens select chip and equipment controls.
  
• Visa restrictions for Chinese students and researchers ease.
  
• Beijing steps up enforcement on fentanyl precursor production.
  
  

The only thing missing? Signatures from Xi and Trump.

Markets aren’t waiting—they’re pricing in détente, not disruption.

A Shifting Global Order: Welcome to the Age of Monsters

Antonio Gramsci once warned, “The old world is dying, and the new world struggles to be born. Now is the time of monsters.”

That moment may be here.

• Multilaterals like the IMF, World Bank, UN, and WTO are losing authority as geopolitical fractures deepen.
  
• Globalism is in retreat, replaced by nationalist trade policies and mercantilist rhetoric.
  
• Populist waves are reshaping leadership across Europe and the U.S.
  
• Central banks face creeping fiscal dominance, their independence tested as deficits balloon and political pressure mounts.
  
  

The investor takeaway: This is no longer a market that responds to earnings or inflation prints alone. It’s a market reacting to regime change—political, monetary, and structural. Adapt accordingly.

Your Energy Partners

We help banks, family offices, HNWIs, non-profits-and developers in making strategic investments in clean energy projects that create tax credits to lower investors’ taxt liability while providing essential capital for developers.

• Clean Energy Capital
• Clean Energy Project Advisory
• Clean Energy Tax Savings

Book a Call

Market Takeaways: Stay Nimble, Avoid the Crossfire

Amid rising volatility and political noise, the smartest play may be to sidestep the ideological battles and focus on positioning:

• U.S. equities still anchor economic growth and help close the fiscal gap via capital gains and retirement distributions.
  
• Gold and Bitcoin are beneficiaries of dollar weakness and tightening liquidity.
  
• Precious metals offer asymmetric upside during regime shifts.
  
• And beware: Bearish narratives are often monetized—fueling trading volumes, subscriptions, and fear-based positioning.
  
  

As the main character, Gordon Gekko, famously said in the 1980s movie, Wall Street:

“If you want a friend, get a dog.” And remember, you don’t need to outrun the bear—just the guy behind you.

Central Banks Under Scrutiny: William White’s Warning

A former central banker himself, William White pulls no punches:

1. Inflation targeting is a slow leak, not a precise tool
   
2. Debt addiction has governments hooked on easy money
   
3. Models won’t save us—economies don’t operate like machines
   
4. Quantitative easing is akin to sugar—good short-term, bad long-term
   
5. Next step? Fed and other central banks must stay hawkish while urging fiscal stimulus—politicians must carry the fiscal torch

Market Update: Resilience in the Midst of Noise

• Stocks shrugged off early turbulence—cleared within weeks.
  
• Bond volatility (MOVE) and VIX spiked briefly, now calmed.
  
• Silver held firm—watch for:
  ‍
  
  1. Sustained $35–$40+ range.
     
  2. Potential short squeeze.
     
  3. High premium on physical supply.
     ‍
     
• Even Tesla rebounded from its X/IPO spat.
  
  

Reality check: Many bearish narratives serve brokerage and hedge fund fee revenue. But fundamentals? Strong balance sheets, low unemployment, business deregulation, and decent policy offsets suggest recession risks remain distant.

Narrative Busting

• CPI fell below expectations this week.
• Bond auctions— showing less stress: $120 billion priced in 3, 10 and 30-year at lower rates than pre-market.
• Tariffs: once inflationary, now increasingly benign.
• Rate cuts from Powell? Markets are virtually unanimous: “No” next week.
  
  

Final Word

Markets may be in a summer lull—but beneath the surface, tectonic shifts are underway. If you’re not navigating fiscal and political regime change with intent, you’re drifting. 

MacroMashup’s mission is to help you cut through the haze so you feel informed and confident about your investment decisions. 

Want to take even more control? Join our Fearless Investor Community launching in Summer 2025 here: https://neil-winward.kit.com/community 

‍

‍

Markets in the Mirror: When Sentiment, Policy, and Data Collide

The past two months delivered a masterclass in market psychology.

April gave us panic.

May gave us euphoria.

Neither was tethered to fundamentals.

From algorithmic stampedes to political noise fatigue, investors are relearning the painful truth: narrative is not data. Here’s what really moved markets—and what you can learn from the misfires.

Greed vs. Fear: A 67-Point Mood Swing

In just six weeks, the CNN Fear & Greed Index swung from 4 (Extreme Fear) to 71 (Greed).

That 67-point lurch was more violent than anything we saw during the 2022 bear market.

• April: Tariff shocks and a Moody’s downgrade spooked markets. The S&P 500 fell to 4,160, wiping out $9 trillion in equity value.
• May: Dip buyers and institutional flows stepped in. The S&P rallied 17% off the lows, adding $400B in market cap per day.
• Even Bitcoin wasn’t immune—its Fear & Greed Index surged from 10 to 66.

Lesson: When sentiment hits extremes, it’s often a signal to do the opposite.

April’s fear was a contrarian buy.

May’s greed may be an early warning.

Trump’s Tariff Theater: The T.A.C.O. Pattern

T.A.C.O. = Trump Always Chickens Out

That’s how Barclays now labels Trump’s recurring trade threats: high on volume, soft on follow-through.

Markets are adapting:

• Tariff noise rattles soft data (like sentiment surveys), but barely touches hard data (earnings, rates, trade flows).
• The VIX barely flinched in May. Wall Street seems to view Trump’s bluster as theater, not policy.

Takeaway: Investors may be desensitized to political shocks—a risky complacency if a real crisis breaks through.

Your Energy Partners

We help banks, family offices, HNWIs, non-profits-and developers in making strategic investments in clean energy projects that create tax credits to lower investors’ taxt liability while providing essential capital for developers.

• Clean Energy Capital
• Clean Energy Project Advisory
• Clean Energy Tax Savings

Book a Call

Dalio’s Crisis of Credibility

Ray Dalio warned in May of an “imminent financial crisis.”

Reality had other plans:

• The S&P rose 6.2%.
• Bitcoin rallied 14%.
• Corporate earnings climbed 8% YoY.
• U.S. tax receipts hit a record $4.9T (FY 2025).

Not the first time:

• In 1981, Dalio predicted a depression. A bull market followed.
• Between 2023–2025, while warning of collapse, the S&P returned 34%.

Key Miss: Dalio’s models overweight debt and geopolitics—but underestimate resilient fundamentals like earnings, cash flow, and innovation.

Even legends can lag reality. Don’t outsource your thinking to macro celebrities.

Bifurcated Markets: Institutions vs. Headlines

We’re in a two-track market:

• Institutions are trading on yields, cash flow, and volumes.
• Retail investors are reacting to headlines and vibes.

Opportunity lives in the gap.

Those who can tell signal from noise—win.

3 Principles for Market Sanity

1. Sentiment is cyclical

 • Use extremes in fear/greed as contrarian indicators—not confirmation.

2. Political noise fades
 • Earnings and interest rates outlast soundbites.

3. Data > Gurus
 • Build a system based on signals—not talking heads.

AI Is Quietly Rewriting Strategy—Far Beyond Search

Forget chatbots. AI’s real revolution is reshaping business, medicine, and media behind the scenes.

1. AI-Powered Business Strategy

Upload customer data + value props → Get instant go-to-market plans, pitch decks, and brand strategy.

2. Diagnostics Without Waiting Rooms

• Spectral AI’s DeepView diagnoses burn wounds with 95%+ accuracy.
• AI tools now review labs, symptoms, and history—no co-pay, no waiting.
• AlphaSense automates medical research at enterprise scale.

3. Earnings Call Disruption

• Zoom and Klarna used AI avatars in investor calls.
• AI highlights facts, strips fluff, and flags evasive statements.

4. Automated Podcasting at Scale

• Tools like Jellypod can clone your voice, convert articles to episodes, and publish—no mic needed.

5. The Human-AI Imperative

• Interpret: AI finds patterns. You apply meaning.
• Audit: AI has blind spots. You provide context.
• Leverage: Scale thought leadership, don’t outsource it.

Charts/In the Markets

Silver: a hot week relative to its big brother, gold

• Silver bugs have been calling for a breakout for…a decade.
• It broke $35/oz - next stop $50.

Watch Relative Value—Focus on The Ratios

• USD crushed by gold—last 5 years.
• USD crushed by Bitcoin—last 5 years

• Divide one asset priced in USD.
• By another asset priced in USD.
• Takes the depreciating USD out of the equation.
• Leaves just relative strength.

What’s Next/What To Watch

• Check out Jim Bianco on the consistently excellent Forward Guidance podcast discussing how 5% 10-year rates will become the new floor.
• For a check-in with Freedom Caucus member Senator Ron Johnson, watch the boys at All-In figure out the Senate fate of One Big Beautiful Bill.
• Don’t forget to compare the Non-Farm Payrolls this Friday, June 6th—consensus 125,000—130,000 with April’s 177,000. If the NFP number undershoots, the markets will likely trade up on the expectation that the Fed is more likely to ease, and vice versa.
• And, get some popcorn and watch the Trump/Musk relationship meltdown on X—with the Tesla share price…

Enjoyed this newsletter? Get Involved.

• Subscribe to MacroMashup: one email a week, zero noise.
• Book a call with Dakota Ridge Capital if you’re investing in clean energy or want to optimize for tax strategy
• Watch us on YouTube, or tune in via Spotify / Apple
• Collaborate with us at contact@macromashup.com