Crypto Volatility, China Rallies... Is the U.S. Next? | Macro Mondays: August 25, 2025

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1:23Hello out there. Welcome to another edition of Macro Mondays here from Real Vision. My name is Mikkel Rosenwald, your usual host. And as usual, I'm joined by you, Andreas. Welcome to the show. Thanks, Michael. What a Friday afternoon. Yeah, yeah, I was going to ask you about that. Did you have a good weekend despite going to your in-laws and having the travel interrupted by Jay Powell there? Well, no, but I'm speaking mostly about the weekend with the in-laws. So the weekend was very, very good from an investment perspective. Everything hand out the way we hoped for on Friday. and I think it was very telling that a lot of people donned their recession shirts ahead of this Jackson Hole speech and in many ways it was a mixed bag of goodies but the market was really, really upbeat after the speech from Jay Powell on Friday and I think that's the main conclusion here Monday even though we've had a lot of debates ongoing online since Friday on whether was it his end goal to get markets to rally and all of that but we'll get to that.

2:28Yeah, absolutely. We'll dive much more into that. It's always great when you're with the in-laws or some places where you don't want to be, you can sneak off to go to the bathroom and you get some green candles on your phone there. That always helps with the evening, doesn't it? Great stuff. We'll get much more into that address. You did a whole report on the situation on the real estate market, the housing market. We'll dive a little bit into that. Also look at oil a little bit if we have time for that. Remember, this is a sneak peek into the analysis and research that we do and publish on Real Vision to get the full access.

3:01You need the ProTier. With that, you get reports every week, plus a lot of extra content. This week, we have a ET macro meets micro on Tuesday. I'm sorry. I'm reading this completely wrong from my list here. Sorry. Tomorrow it is. We have your macro meets micro, Andreas. On Wednesday, we have Chris Bullock and Caleb Franson on the ProTier. And on Thursday, we have Nico and Joe discussing the entry-level equity portfolio of Real Vision. So don't miss this. Sign up to the approach here to stay ahead of the curve. But first, Andreas, let's jump right into our laugh of the week. And we already touched upon the topic.

3:42Let's have the image up here, the image of the week. And I mean, Andreas, this is how we all look when we get out of a plane, especially if we've been on business class or first class where you're actually able to sleep on the plane. But what a picture. I mean, imagine, we just talked about this before going online here. Imagine having this job address. Every time you step out of an airplane, every time you order a word, it moves billions and billions in the markets. But, I mean, this is how we all look when getting out of an airplane address. Yeah, to some extent, I would probably just wear a track suit.

4:15Yeah, but in any case, you're right. He actually looks like he's been sleeping on the plane there. And, you know, you're right. Obviously, this is a high-stake job, and it's always been a high-stake job. But the stakes are higher right now, given the ongoing pressure on the committee, right? Last week, we obviously got the story around Liza Cook, a sitting member of the committee, allegedly using two addresses as her primary residence. And when you use your primary residence in a mortgage application, you get a lower mortgage fee. I don't know whether that's right or wrong, but the pressure politically on the committee right now is just immense.

5:04Something that I cannot really remember having seen before in the U.S. during my professional adulthood. So, you know, I kind of get why he's tired. He looks tired, doesn't he? And either he looks tired or else he just found out that his wife peed in his coffee every single morning for the past 10 years. I don't know. But he looks very tired at least. Probably. He had a really great sleep. Speaking of Liza Kirkandres, here's the truth from Donald Trump, obviously. I always like it when you line things up in a very, very concrete, specific way here. This is Misi, as you would say in consultancy terms, a big red cross over Liza Cook, the fraudster.

5:51This is almost like a house of cards move to get these accusations out there. And it's, I mean, from this truth, this completely underscores your point from the past few months, Andres, that Trump is working actively to create a new majority on the board and going at them one by one. And he's very, very clearly defined who's Biden guys, who's Trump guys, even though Jay Powell was appointed by Trump. But that's another story. It's too late. but i i actually you know actively tried to google this picture of liza cogan she looks like jabba the hot picture and i couldn't find it so i don't know where he found this picture but it doesn't really look like her but anyway um what this this is a very telling truth from from trump in the sense that the FOMC minutes last Wednesday kind of revealed that he's not really on top of developments within the FOMC yet.

6:58The speech from Powell on Friday was accommodating, but not a big step in the direction that he wants. So he obviously needs to shake up this committee to an even larger extent than what he earlier thought was necessary. and it's one of the key messages that i've repeated over and over and over in my research for the past couple of months that he needs a hand grenade uh candidate if you know what i mean right someone willing to truly shake up the institution and to form a true majority in a committee like the fmc um you need the political backing obviously he's got that but you also need time because typically you're able to you know handpick one or two candidates during your presidency but if he can appoint a chairman willing to truly shake up things and annoy the sitting members maybe he'll be able to force a few resignations and i think that's exactly where they're heading.

8:07They're trying to shake this up in a way that is completely uncharted in many ways. They're trying to get people to resign, especially those who point to Biden, obviously, to get a majority that is a supermajority, which is what you need to really guide the direction in a truly different direction. It's a completely new scenario from from previously. Andres, let's focus on Friday's speech a little bit because obviously markets loved it. Huge positive reactions. We'll get back to the developments in crypto particularly. But then over the weekend, a lot of contrarian voices say, oh, maybe this wasn't as positive as it was laid out to be.

8:56Some people threw this into Claude and Grok and ChetKPT and what have you. And, oh, this was maybe a little bit more hawkish. just the overall if you if you brush away the market reactions how did you initially read j pal statements well so okay first of all what you need to consider is that large language models do not necessarily take the very live context into consideration when they assess this so in many ways i kind of agree that it wasn't as soft as it was perceived to be but remember that every single pundit on earth highlighted the risk that powell would you know sort of semi-revolved against trump in the run-up to this conference right and he didn't you know not a single message on tariffs outside of scope, not a single message on the political pressure outside of scope.

10:02So he stayed in his lane in many ways. And I think that was comforting for markets in many ways. And on top of that, we had a price action heading into this Jackson Hole conference that clearly smelled like profit-taking by many institutions, to some extent also retail investors. You could see that from ETF flows, from hedge fund flows into the conference. And on Monday last weekend, we discussed this very topic seven days ago, Michael. I was kind of in the same camp that, okay, maybe he's not really willing to play ball with the political agenda of the Trump administration, but on Friday, and we telegraphed this out to subscribers of Real Vision as well, we basically said that, well, okay, we've listened to this all week now.

10:57I mean, everyone is saying this, so is there really any news values to this? And large language models are not really able to, at least not live, capture this kind of sentiment and positioning. Having said that, I'd like to dive into a few details, Miguel. and let's start with the headline from Bloomberg Friday morning and that was kind of what kick-started my whole idea that this was very, very much priced in. It's on page four. And I respect Mark Cotmore a lot. He's one of those guys on Bloomberg television day in and day out. And it's tricky to find something clever to say when you need to be on air every single day.

11:40Thankfully, we're only on air a couple of times a week, Miguel. And he said the following, and the headline is actually 100 % correct. U.S. underperformance will extend whatever Powell says. It doesn't matter. He could say whatever. And anyway, the U.S. equity market will underperform. That was obviously wrong. and I think it is very telling the institutional sentiment around US equities, US assets in general that this perceived lack of institutional credibility due to the crisis between Trump and the FOMC, between Trump and the Bureau of Labor Statistics etc. will end up harming the US investment story overall and right now you don't really have any strong signs of that.

12:34I think on page, I included a chart on the fund flows into the US on page 13, because I just wanted to show that in relation to this discussion. Yeah, is this one right? Yes, exactly. And it's just, you know, we're breaking to all-time highs in terms of the annual flow into the US, which is in such a sharp contrast to the consensus you've heard over and over and over since liberation day etc and you know to be honest i was kind of in that camp to begin with uh during march and april in the run-up to this whole tariff debacle and all of that but right now this is a super strong flow picture and it's a super strong flow picture amidst everyone sitting there uh claiming that this is not a rally you should buy into to, which makes me think that it's got legs and plenty of legs.

13:28So who's driving this address? Is this institutional money? Is this retail investors? Who's driving this? We're talking about investors reluctantly buying into it. That's my reading of it because you hear this over and over and over that the institutional credibility is on a slippery slope in the US. foreigners struggling to accept the notion that the US has changed geopolitical trends and so on and so forth. But yet we're seeing this. So I think we see a lot of participants, but they're reluctantly. That's it, Spade, if that makes sense. I don't think you can pinpoint who's the exact investor type here.

14:14I just think that it remains the case that a lot of foreigners are reluctantly anticipating. So Andres, if you're out there as an investor preparing for the September meeting, we're obviously anticipating a cut, 25 basis points. What happens if we don't get that? That would be bad. But I don't think it would be the end of the world. And let me highlight a few arguments why. So to begin with, if you look at the PMI cycles or the gauge of the growth cycle in the US, we got the S &P PMI out last week. Again, surprising to the upside. And as I've stated quite a few times, and you can read the in-depth report on the topic, if you're a member of the Real Vision Pro tier, the S &P PMI is much better equipped to deal with the kind of cycle that we're currently faced with since it's a broader survey.

15:21They leave out questions about international operations, which is very important in a terrorist-fueled world, right? and they don't put as much emphasis on the large companies. And the S &P PMI is basically, it's not through the roof, at least accelerating, right? And I think you and I have discussed this quite a few times, because if you move from, say, levels around 48, 49 to 54 or thereabout, which is where we're at with the S &P PMI, You typically see a very, very solid return profile in that period. But we haven't seen the ISM moving in the same direction, or it's basically moving nowhere.

16:05I'm still looking for explanations on why it's not moving, but I think it's very driven by energy. We'll get to oil in a second, because energy has been the lacking indicator in many ways in this cycle. We still have very low energy prices compared to what we should have in many ways. So a quick break in your regular programming. If you're serious about your future, grab my free report called Prepare for 2030. I think you've got five years to make as much money as possible. And this guide will help you navigate what's coming. The link is in the description. Download it now. What I'm trying to say here is that the cycle is actually doing better than feared.

16:46And I think that's the least telegraphed part of the cycle right now, because everyone's talking about this obvious wall of worry around tariffs. Fair enough. I get why. But when you see PMIs rallying the way that you've seen PMIs rallying in the S &P gauge of things, it's typically something to notice. And as I've said, I've laid out the reason why you should trust that methodology to a larger extent than the ISM right now. And I think it's worthwhile looking towards those trends right now rather than the ISM. And nobody's doing it. Nobody's doing it. I kind of get the feeling we have a saying in Denmark, I don't know if you used it that much in English, of the bumblebee address, that it's not supposed to be able to fly, but no one told it.

17:40I kind of get that feeling about the economy, that a lot of economists and institutional investors are very bearish on this. But things are going okay and heading upwards with still a little upwards potentially if we get the ISM moving. Another contrarian view here, Andreas. Let's just get this X on the screen here. You picked this as one of the hot takes of the week, Ross Hendricks. Bitcoin top being in. So obviously, Andreas, we've had an incredible weekend in crypto. A lot of guys are calling this a bubble, saying we're close to the peak that you should get out. What's your take on this, Andreas?

18:19Well, my simple take is that I disagree, but I love the tweet anyway because at least he's forming an opinion. Yes, very specific. So, you know, Bitcoin is up since he tweeted. We start there. the second thing I wanted to say about this is that again if we're thinking about Bitcoin in the business cycle context we're currently at between friends 48 in BISM you've never seen a top forming with that level of business sentiment assessments you've never seen it so in In my opinion, it's very typical for this stage of the cycle where there's a lot of discussions ongoing, are we accelerating, are we decelerating, back and forth, back and forth, that you get these messages right, left, and center, one claiming that it's accelerating, one claiming that it is decelerating.

19:24But when you look at it empirically, it's very rarely the case that you actually see a top forming with the kind of business cycle patterns that we're observing right now. So I think that's telling in itself. I think it's very telling in itself the kind of reactions we saw on Friday. You said it was a good weekend for crypto investors. It was a good Friday afternoon, basically, right? Ethereum investors got a rally of between French 12-13 % on the day and then the weekend was kind of on a slippery slope at least into Monday now as we speak it's recovering again but we're at key levels here in many ways and I'm personally upbeat still mainly since the institutional sentiment is so low.

20:22And I think that's probably the thing to highlight still. And then the second thing I wanted to highlight in relation to this business cycle, in relation to how the price action is perceived by many, is what's ongoing in China, Michael. And it's on page 12 because we've guided our audience in the direction of investing in China for the first time in a long while. and well it looks very good right now this is Xi 'an Xi 'an index yeah it's up 15 % since 1st of August something like that it's a very very rapid acceleration this is Chinese tech mainly right? yeah but also else stocks in other sectors but Chinese tech is doing very well and okay I'll ask a few questions in your direction in a second, but let me lay out why this is important first.

21:21This is important because it's a signal that the weak dollar is actually working. You do not see these kind of returns in Chinese equities unless the dollar is playing ball. So this is a weak dollar filtering through the international financial system in the way it's supposed to do. So that's a point for one. Because a weaker dollar should make it harder for Chinese companies to export to the US. So is this a matter of capital flows going back into China or what's the logic here? It's a matter of flows. It's a matter of debt, right? So if you're a large exporter in emerging markets, it's actually almost as important, if not more important, whether your debt load is tangible or not from a financing perspective.

22:12And right now, with signs of dollar liquidity, being added due to what sorry Powell said on Friday it's it's pretty good news for EM markers overall that you see this softness from the central bank and I can I can guarantee you that if we move even further towards the Federal Reserve being yeah completely under the Trump administration's control it's it's a very good story for Mexico Brazil China you name it because they thrive when dollar liquidity conditions are solved. So I think that's the main line of arguments here. The other thing that I'd highlight around this China trade, which we've, by the way, timed almost with the perfect timing, is that China actually thrives when there is no progress in Ukraine.

23:09and we added this to our portfolio both you know we like the idea that china is accelerating due to the dollar and the dollar liquidity story but we also added it with the caveat okay let's see what's going on in ukraine right um and you know full transparency i've tweeted and said over the past couple of weeks that the deal probability is probably underestimated but what's your take after this weekend? Because as far as I could see on Sunday, Russia keeps referring to this security guarantee as being a no-go or where are we? Yeah, and that was very much where I placed my positivity or my optimism around a deal being reached.

23:55That it sounded like Trump had an understanding that Putin was more willing to accept, to be very specific, European troops in Ukraine after the war. that doesn't really seem to be the case. So perhaps the most likely explanation is that Trump simply misunderstood or overestimated the response that Putin gave him. Still, to some extent, that's still a problem for Putin, because if Trump had this understanding, if Putin doesn't deliver on it, what happens? In any case, Putin has succeeded in postponing, delaying the process once again. We have no new sanctions on Russia. The talk of them is dying down.

24:37Trump is probably moving his attention elsewhere, perhaps to Venezuela. We can get Bachelorette next week, perhaps. And it seems like Putin is getting away with this, perhaps. He's now also trying to walk away from that one-on-one meeting with Zelensky. So I have to say that my optimism has been curved somewhat during this week. it's more we're seeing Marco Rubio much more in the media talking about a potential deal that's not necessarily a good time because if we were close to a deal then Donald Trump or J.D. Vance would be hitting this so I have to say that my optimism has been curbed somewhat I don't think we're that close to an agreement it's still very much possible because it seems like the Russians do have some respect for this for new Trump sanctions So Trump has found some weapon to pressure the Russians, but they're still miscommunicating heavily, and they're still not in a place where they've forced Putin to truly make concessions and truly get to the negotiation table.

25:41So it's a tricky situation. Right now, I think we are at risk of losing the momentum that was built around the Alaska summit and the Washington summit here. Just the fact that this is one of our last topics today speaks volumes because this should be on top of every show if the momentum was still going. So let's see. There's still potential for some less overt discussions and talks taking place right now. But I have to say my optimism has been curbed a little bit here, Andres. Let me just ask you because one thing is that the momentum is gone. I clearly agree with that view. if we look at prediction markets we're talking less than 20 % odds for probabilities priced in that they'll reach a deal before New Year's maybe 15 % let's put it around there right now when you look at prediction markets so everybody kind of accepts that notion that it's very very difficult to us to get this over the finish line before New Year's 15 % versus 85 % of not reaching a deal.

26:54Where are you relative to that? I'm still higher than that. I think last week I said 50-50. That's maybe a bit too optimistic, but I'm still higher than that because the two sides have been bending towards each other. We have sort of the playing field of disagreements has been narrowed down to a place where can you find some solution where you don't have European troops on the ground, but close by. You have some U.S. and the air forces close by. Can you have some middle ground there? We are seeing a lot of polls coming out of Ukraine that the population is ready for peace, that they want peace.

27:33You can understand why. The war isn't necessarily going in Ukraine's favor. They had some successes this week. So I still think there is an appetite for peace on the Western side of this conflict. Like there is some appetite for peace as well on the Russian side. We keep hearing histories of the Russian economy imploding. That's I don't I don't buy into that at all. But but there is some willingness also because they do have some respect for these Trump increased Trump sanctions. So, yeah, I would probably I would put it a little bit higher, maybe maybe at 30 or 40 percent. I don't know. It's tough to put these percentages on it.

28:10But I do think there's a chance for something because the sides are talking, but it's not going to get done this week. That's for sure, Andreas. So you see there is a chance. There is a chance. Absolutely. Just one final note on China, something very, very positive for China, because we are hearing increased reports. And I'll elaborate a little bit on this in my The Drill article later this week, that China is beginning to take over a lot of the Russian oil exports that were going to India. And when China does that, it's most likely because they're getting a further discount from Russia because Russia has to sell this to someone.

28:47And they're more or less only left with China as a buyer for all this oil. So this means that China will be having even greater volumes of very, very, very cheap oil flowing in from Russia. This doesn't affect the global market of oil because India will then have to buy the same volumes elsewhere. But it could be positive for China. they get to fill up. We're hearing some reports of that, that they're filling up their stocks, et cetera. So a positive development. This also kills the idea that, we heard that a lot earlier this year, that Trump was playing some sort of 4D chess game where he was trying to wrestle Russia away from China and drive a wedge in between Russia and China.

29:31These secondary sanctions are doing the exact opposite. It's making Russia even more dependent on China because China seems to be the only place where Russia can offload all their oil at this point. So just an interesting little development. We're still seeing very, very low oil prices, Andreas, and we'll expand a little bit on that. Miguel, let me just add that everything you just said is absolutely spot on. to the extent that we accept the notion that China is not in line for secondary tariffs. And so far, and it's been one of my key views since this almost Texan standoff between Xi and Trump back in April, May, whatever it was, the U.S.

30:23is not willing to go toe-to-toe with China to the end. and we've seen that with these secondary tariffs. India is obviously buying, I think, roughly 1.7 million barrels of oil from Russia per day. China, a little bit less, but they're buying between friends approximately the same and only India gets this secondary tariffs added. So obviously there is something ongoing between Xi and Trump that is outside of this scope. And it again emphasizes my point that China is a pretty decent safe haven right now. We've made 20 % of this bet since we added it. Follow our pro tier portfolio for the right timing on these bets.

31:06Absolutely. And that was obviously the conclusion I was headed to, that this also reinforces the China case, even though it's already made its rounds. Great stuff, Andres. Any final remarks or things for people to take note of during this week? I just have to conclude on this topic of Powell and his Jackson Hole speech again. Friday afternoon, I was driving my car to the ferry. And when I arrived in the harbor and I finally got the chance to look at markets, everything was up. The conclusion was that Powell was dovish. and you know 48 hours or whatever it is 72 hours later we're talking about recession was Powell misunderstood and all that shit again and I still want to highlight this every single fund manager I'm exaggerating but you get by where I'm heading is vastly underestimating the rebound in US assets and we're seeing the same pattern that this Chris credibility of institutions is being questioned all the time.

32:18And while I get why, it's very much too early to really alter your portfolio because of that. So I think buying into the US, buying into US proxy assets, which we have to conclude that crypto assets are now, I think is a very good story still. Most hated rally, I think you called it at one point in the rest. So thanks a lot for joining us this week. next week we are not recording it's labor in the u.s so we're skipping that one we'll be back we'll be back with you in two weeks time see you then you obviously enjoyed the episode because you're here with me at the end but listen don't forget to go to realvision.com forward slash join and grab a free membership it's an incredible community packed with alpha great investment ideas and the research that you need to help you unfuck your future so get started now go to realvision.com forward slash join.