Sonu Varghese
10 Takeaways From Our Conversation With Cliff Asness
Ryan Detrick and I just celebrated recording our 150th episode of Facts vs Feelings. It’s been three years since we got started and we want to thank you all wholeheartedly for the amazing support. Our listens and views have been growing, and we’ve had a lot of fun along the way, including having some amazing …
Sonu Varghese
August 27, 2025
Powell Opens the Door to Rate Cuts
Federal Reserve (Fed) Chair Jerome Powell’s speech at Jackson Hole was the event of the week and with good reason, as investors expected it to signal the direction of monetary policy over the coming months, especially whether the Fed would hold or cut rates at their next meeting in September. And it does at least …
Sonu Varghese
August 25, 2025
How We Make Room for Gold in Our Strategic Allocation Portfolios
In my previous blog, I discussed our longer-term strategic outlook, the core of which is that we remain optimistic about globally diversified equities. But even beyond equities, our view is that: Inflation will be volatile going forward. This doesn’t mean average inflation will be much higher than 2%, but we’ll see more volatility. The Fed …
Sonu Varghese
August 15, 2025
Gold Is Shiny Enough for a Strategic Portfolio Allocation
We’ve made no secret for our love for the shiny object over the last two and half years (and not just because my name is derived from the Hindi word “sona,” which means gold). I wrote about gold as a crisis hedge back in March 2023, amid the Silicon Valley Bank Crisis. We were amongst …
Sonu Varghese
August 14, 2025
The Two Sides of AI in the Economy
This chart from our friend, Neil Dutta, Head of Economics at Renaissance Macro, tells an absolutely incredible story if you ask me: it tells you that spending on artificial intelligence (both IT hardware equipment and software) contributed an average of 1.0%-point to GDP growth over the last two quarters. That’s more than the contribution of …
Sonu Varghese
August 7, 2025
The Economy Is Currently Being Held Up By AI
This was a big week if you wanted to get a picture of the economy, inflation, and even policy (both monetary and tariffs). Here’s the big picture: The labor market is clearly slowing, despite a low headline unemployment rate of 4.2%. Soft payroll growth and easing wage growth means aggregate income growth is slowing. Inflation …
Sonu Varghese
August 1, 2025
This Popular Economic Indicator Points to Recession But We’re Skeptical
One of the most popular economic indicators is the Conference Board’s Leading Economic Index (LEI), and it currently points to recession. The LEI has historically had a high correlation with GDP growth – the chart below shows year-over-year change in both. You can see how the index started to fall ahead of the 1990, 2001 …
Sonu Varghese
July 25, 2025
The Trade War Is Over. Thank You For Your Attention to This Matter.
In my opinion, the trade war is over. There may be more tariffs to come, especially a few large tariffs on August 1st on a bunch of countries (50% for Brazil!), plus sectoral tariffs on things like copper, pharmaceuticals, semiconductor chips, and electronics. But even those may be postponed (in fact, pharma tariffs may actually …
Sonu Varghese
July 24, 2025
The Fed Is in a Bind and Jerome’s on the Ropes
One big question on everyone’s mind has been how tariffs would impact inflation. This is especially pertinent for the Federal Reserve (Fed), as it’s going to determine their next course of action—whether they continue to wait or cut rates sooner rather than later. April and May were too early for any tariff impact to show …
Sonu Varghese
July 17, 2025
How Will the One, Big, Beautiful Tax Bill Impact Markets?
One of the opportunities we highlighted in our 2025 Outlook was a big tax bill that boosted corporate profits, similar to 2017. We never believed it would be as large as the 2017 tax bill’s boost on profits—after all you can only cut the corporate tax rate from 35% to 21% once—but there was still …
Sonu Varghese
July 9, 2025