Summary

Trahan Macro Research's leading indicators suggest recovery, supported by looser bank lending standards and improving consumer confidence. However, tight labour markets and high capacity utilisation pose inflationary risks. Trahan predicts the Fed will reverse its easing cycle, resume rate hikes, and further invert yield curves, complicating housing. He critiques the Fed’s delayed rate hikes and premature cuts and notes tariffs as a key inflationary risk. Trahan advises investors to focus on cyclicals with pricing power and strong buyback yields, which are better suited to inflationary conditions than growth-heavy indices like the S&P 500.

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