MacroVoices #471 Tian Yang: Tariffs Will Continue Until Morale Improves
Tian Yang discusses how Trump's policies create a challenging macro environment with sticky inflation above target, trend-to-below-trend growth, and high volatility. He argues Trump is repeating Reagan's playbook using trade policy for reshoring, while the Monroe Doctrine is returning to geopolitics with localized spheres of influence.
Summary
Tian Yang, CEO of Variant Perception, provides a comprehensive macro outlook in the context of Trump's policy changes. He argues that leading economic indicators (LEIs) remain important but must be contextualized with political trends, as survey data will be affected by tariff sentiment and policy uncertainty. Yang identifies two major strategic overlays: Trump repeating Reagan's playbook of using trade policy to encourage manufacturing reshoring, and the return of the Monroe Doctrine with America dominating the Americas while China gets Asia. The macro environment shows trend to slightly below-trend growth around 2%, but with sticky inflation above target, creating a stagflationary tilt. Yang outlines four potential recession paths: fiscal risks from DOGE spending cuts, tariffs killing the manufacturing recovery (getting 2018 Trump instead of 2017 Trump), housing weakness from higher rates, and high-for-longer rates affecting private credit. Their macro risk indicator sits at neutral around 50, suggesting mixed upside-downside risks. For equities, Yang sees modest downside risk with expectations too lofty, favoring energy over consumer discretionary and large caps over small caps. In global markets, he's taking profits on China and rotating back to India after extreme relative performance. For fixed income, fair value on 10-year yields is around 4.2%, with potential for a tradable range if yields break 4%. The dollar faces conflicting signals - models suggest slight bearishness but policy mix remains dollar bullish similar to Reagan era. On commodities, Yang has turned more cautious on gold despite the bull case, viewing it as fairly valued and preferring TIPS and industrial commodities, while noting that continued outperformance would require a 1970s-style monetary regime change.
About this episode
MacroVoices Erik Townsend & Patrick Ceresna welcome, Tian Yang. They’ll cover LEIs and break down Variant Perception’s outlooks on everything from stocks and fixed income to FX and commodities, including gold. https://bit.ly/41JzAaB Click Here To Register FREE to Big Picture Trading's Hedging Webinar: https://www.bigpicturetrading.com 🔻Download Big Picture Trading Chartbook 📈📉: https://bit.ly/43IBivp ✅Sign up for a FREE 14-day trial at Big Picture Trading: https://bit.ly/4cMmu0d 🔴 Subscribe to Patrick’s Youtube Channel: https://www.youtube.com/@Patrick_Ceresna 🔴 Subscribe to Erik's Substack: https://eriktownsend.substack.com/ 🔴 Check out Energy Transition Crisis on YouTube: https://www.youtube.com/@EnergyTransitionCrisis1 Please visit our website https://www.macrovoices.com to register your free account to gain access to supporting materials
Key Insights
- Yang argues Trump is repeating Reagan's playbook by using trade policy to encourage manufacturing reshoring and job creation in the US
- Yang claims the Monroe Doctrine is returning, with America dominating the Americas while China gets Asia as its sphere of influence
- Yang identifies the current macro environment as trend to slightly below-trend growth around 2% with sticky inflation above target
- Yang warns that tariff uncertainty is creating a stagflationary tilt where price components in surveys are rising while future expectations and new orders are declining
- Yang argues the market is getting 2018 Trump (high volatility, tariff-focused) rather than 2017 Trump (market-friendly policies with Congress)
- Yang's macro risk indicator shows neutral conditions around 50, suggesting mixed upside-downside risks rather than extreme bullish or bearish scenarios
- Yang sees energy as the most attractive equity sector while consumer discretionary is the biggest underweight due to fair value models
- Yang is taking profits on China equities and rotating to India after extreme relative performance reaching plus/minus two standard deviations
- Yang believes fair value for 10-year Treasury yields is around 4.2%, with potential for tradable ranges if yields break 4%
- Yang sees conflicting signals on the dollar - models suggest weakness but the policy mix of trade policy plus fiscal deficits remains dollar bullish
- Yang has turned more cautious on gold despite acknowledging the bull case, arguing it's fairly valued and preferring TIPS and industrial commodities
- Yang argues that for gold to continue outperforming significantly would require a 1970s-style global monetary system reform rather than just gradual changes
Topics
Transcript
This is Macro Voices, the free weekly financial podcast targeting professional finance, high net worth individuals, family offices, and other sophisticated investors. Macro Voices is all about the brightest minds in the world of finance and macroeconomics telling it like it is, bullish or bearish, no holds barred. Now, here are your hosts, Eric Townsend and Patrick Ceresna. Macro Voices episode 471 was produced on March 13th, 2025. I'm Eric Townsend. Variant Perceptions CEO Tian Yang returns as this week's feature interview guest. And of course, he brought one of Variant Perceptions famous slide decks with him. We'll talk LEIs and step through Variant Perceptions outlooks for everything from stocks to fixed income to FX to commodities. Including gold. After…
Full transcript available for MurmurCast members
Sign Up to AccessMore from Macro Voices
MacroVoices #554 Yasir Arafat: Mass Manufacturing Nuclear Power Plants
Yasser Arafat, CTO of Allo Atomics, discusses the company's plans to mass-produce advanced nuclear reactors at scale, arguing that cost-competitive nuclear energy (cheaper than coal and gas) could be achieved within years, not decades, by leveraging manufacturing principles similar to Tesla's approach. He addresses fuel supply chain constraints, nuclear waste recycling potential, and competitive threats from China while outlining a pathway to transition global energy systems away from fossil fuels.
MacroVoices #553 Brent Johnson: Disparate Housewives
Brent Johnson discusses the dollar's breakout above 102, analyzing why the greenback continues strengthening despite expectations for decline, while also exploring the deepening coordination between the Federal Reserve and Treasury Department in what he calls the "Disparate Housewives" framework. He argues the US remains positioned to weather higher rates better than other economies, and frames the current geopolitical environment as analogous to the early Cold War era with China rather than a replay of the 1970s.
MacroVoices #552 David Rosenberg: Navigating The Noise
David Rosenberg argues that inflation concerns are overblown despite recent energy price spikes, contending that without wage pressures entering the labor market, price shocks will remain transitory. He identifies the November 3rd midterm elections and November 4th Treasury refunding announcement as pivotal catalysts that could trigger significant bond market rallies and economic slowdown as fiscal stimulus ends and gridlock returns.
MacroVoices #551 Michael Every: Decoding The Global Geopolitical Puzzle (Part 2)
Michael Every from Rabobank discusses the interconnected geopolitical tensions between the U.S. and China, analyzing how conflicts in Ukraine, the Middle East, and potential Taiwan invasion scenarios serve as strategic moves in a broader great power competition. He examines emerging policy shifts including potential diesel export bans, AI arms races, and nuclear escalation risks while arguing that national security concerns are overriding traditional free market economics.
MacroVoices #551 Michael Every: Decoding The Global Geopolitical Puzzle
Michael Every of Rabobank discusses interconnected geopolitical crises spanning Iran, Ukraine, and the Middle East, arguing that oil prices don't reflect true disruption risks and that energy will increasingly become a tool of statecraft. The conversation covers potential diesel shortages, U.S. policy responses, the Greenland-Denmark security deal, and China's strategic positioning amid global instability.