March was a tough month for making any economic judgments. The Trump rally in equities was expected to continue, but reality has been a switch to non-US risky assets. A bond sell-off was expected given Fed action combined with more fiscal policy revelations. It did not happen. The dollar was expected to continue its rally based on further confirmation of the Fed being out of step with other central banks. It did not happen.

In reality, stocks were ranged to the downside, bonds rallied albeit still in the range for the year, and the dollar sold-off on Fed action. Perhaps euphoria about fiscal policy change clouded the reality of current macroeconomics. We are neither in a strong secular stagnation or meaningful financial cycle adjustment, but the environment is still not ready for a new era of growth. Further upside in rates, the dollar, and equities will only come with a clear set of less uncertain policies and that is not likely this quarter.

The market focus has to be on the simple core of macro forecasting, real growth, inflation trends, capital flows, and central bank action. The emphasis has to be on what is and not what policies might be. Of course, forecasting is forward-looking, but given the level of uncertainty, the trends in economic data and actual prices are what should dominate and if the trends change, opinions have to be flexible and also change.