#74: 5-Min Monday Macro, Crypto & AI
Sankalp Shangari
MD @ Rising Capital | Crypto & AI Investments | Writing on Macro & Crypto | Podcast: Greed is Good
Macro uncertainty, equities volatility, upcoming FED meeting, earnings and real effect of tariffs to decide next path, Brace for more impact
PREAMBLE
Hey!!!! It’s Monday again. Welcome to another fantastic week!
I spend hours reading, researching, and talking to the smartest founders and investors in macro, crypto, and AI every week. This is my attempt to give you a short 5-10 minute summary on how I am thinking about the macro and crypto markets and what lies ahead. Hundreds of hours summarized, so you don't have to.
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"You are as old as the risks you take. In many ways, aging is not the process of growing old, but rather the slow death of becoming overly protective, scared, and worried about losing what you have. Youth is found in the energy of going for it, taking the risk, and trusting that you'll figure it out along the way."
TL;DR
The Macro Zeitgeist
While Friday gave markets a bit of a breather, I’m not ready to pop the champagne just yet. I’m firmly not in the “we’ve bottomed” camp. Instead, I’ll be sitting back with a tub of popcorn, watching the upcoming financial soap opera unfold: the Fed’s FOMC meeting (March 18-19), the tariff drama set to drop on April 2nd (a potential sequel to Trade Wars: Return of the Tariffs), and the 1Q25 earnings season in April. Before I can confidently say we’re out of the woods, I need to see how these plot twists play out.
Now, a rate cut at the next FOMC meeting? Not happening—at least, not unless Powell suddenly decides to embrace his inner Santa Claus. But what does matter is his tone and any subtle winks toward adjustments in the Fed’s quantitative tightening (QT) program. And here’s where things get interesting: bank reserve levels are sliding toward the 10-11% of GDP threshold, which is like your gas tank hovering just above empty—technically still running, but making everyone nervous. If the Fed decides to hit pause (or outright stop) on QT, that could be the equivalent of throwing markets a much-needed energy drink.
Will it be enough for a full-blown rally? Maybe not. But at the very least, it should be enough to keep markets from having another full-scale meltdown—and that’s worth something.
Macro Reality Check: Five Signs the Economic Tide Is Turning
February Inflation & Rate Cuts: A Tale of Mixed Signals and Market Mood Swings
1- Confusing Data: Like a Weather Forecast That Keeps Changing
2- Fed Rate Cuts? Don’t Hold Your Breath
3- Tariffs & Austerity: The Uninvited Guests at the Inflation Party
4- Services PPI: The Hidden Discount No One Noticed
-2012-2019: Inflation was on cruise control, and the Fed barely touched rates.
-2020-2022: Inflation went on a world tour, peaking at 9% in 2022.
-2023-2024: Cooling, but stubborn—kind of like trying to delete a song you secretly love from your playlist.
-2025
Bottom line - Inflation is like an ex who keeps texting—just when you think it’s gone, it pops up again.
Current Administrations approach to markets - No Parachute, No Cushion, No Mercy, Just Pain
Over the past few days, the new administration has made one thing clear: they’re perfectly fine watching markets struggle. This wrecking-ball approach—hitting the economy with fiscal tightening while the Fed watches from the sidelines—suggests that the long-standing policy safety net investors relied on is nowhere in sight. If markets were expecting a cushion, they might want to check under the mattress.
The Trump administration’s bigger concern? Refinancing $7 trillion in debt over the next six months. To bring yields down, the only real play might be to crash the dollar and the markets. Here’s what’s unfolding:
1?? An Economic Detox with Side Effects
2?? Market Turmoil? Just a “Natural Adjustment”
3?? The Fed Is Watching from the Sidelines
4?? Markets Are Waking Up to a Harsh Reality
Bottom Line: US Administrations new mantra? Tighten first, ask questions later. Investors conditioned to “buy the dip” may need to unlearn old habits—because this time, there may be no safety net.
Global Markets
German Bond Yields Soar—Investors Brace for Impact
German Yields Hit 13-Year Highs: The 10-year German Bund yield jumped to 2.9%, its highest level since 2011—because apparently, debt discipline is so last decade.
Why?
In short, Germany just put the "Bund" in big spending, and bond markets are adjusting accordingly.
Meanwhile China’s consumer inflation turns negative for the first time in 13 months, raising doubts about its recovery. Weak demand and trade tensions threaten Beijing’s 5% growth target
Bank of Canada cuts rate to 2.75% as trade war escalates, with Macklem warning of a ‘new crisis’. The central bank balances weak economic growth with tariff-driven inflation risks.
Macro Summary
Brace for more impact. This movie ain’t over.
DATA TO WATCH
STOCKS, BONDS, FX
Markets Wobble, Traders Flip-Flop, and Volatility Takes a Nap
The market started the week like a sluggish Monday morning—hopeful but ultimately disappointing. SPX dipped to new correction lows, yet volatility indicators barely budged, like they were on vacation. Even softer-than-expected inflation data (CPI, PPI) failed to spark any excitement, leaving the market reaction as thrilling as watching paint dry. However, by Friday, a potential government shutdown dodge gave equities a jolt, sending volatility (VOLs) tumbling. But here’s the real head-scratcher—why was volatility so muted despite stocks sliding? Were traders just unwinding positions instead of hedging? Or did they wait until Monday’s panic to finally hit the panic button and push VIX near 30? Regardless, VOLs kept sending signals throughout the week—whether anyone was paying attention is another story.
Five Market Realities Keeping Investors on Their Toes
1?? High Valuations, Slower Growth Earnings forecasts are sliding as analysts adjust expectations post-correction. Stocks may be technically oversold, but growth worries are like a hangover that won't go away.
2?? Trump, Tariffs, and Tumult The correction began when Trump gave Zelensky the cold shoulder, though early signs of trouble appeared as Meta’s post-earnings rally fizzled. Putin rejecting a peace deal stirred more market unease, while Trump’s recession talk caused a Monday meltdown.
3?? Sentiment Swings and the Reflex Rally Markets don’t move in a straight line—just when things look their bleakest, a reflex rally kicks in. Friday’s bounce was driven by retail traders diving into "animal spirit" stocks, showing they’re not ready to throw in the towel.
4?? The Dangerous Game of Buying the Dip Traders are still piling into aggressive call options, sparking sharp, one-day rallies—only for them to fizzle out just as quickly. Friday was another classic case of "buy the dip" enthusiasm that may be more about FOMO than real momentum.
5?? Looking Ahead: Volatility, the Fed, and Earnings Season With the Fed's next move looming, this week could provide some clarity. A potential peace deal, tariff relief, or good news could be the catalyst markets need. Strong earnings around mid-April could steady the ship, but until then, expect more volatility—especially with the ongoing uncertainty of Trump’s policies.
Final Thought:
Traders are still betting on buying dips, VIX remains strangely unresponsive, and bond yields aren’t tightening. If you haven’t noticed, the S&P vs. TLT spread tells an interesting story. The market hasn’t fully processed what's ahead—so buckle up.
CRYPTO
Bitcoin Strategic Reserve: A Big Announcement, A Meh Market Reaction
Last week, David Sacks (Crypto/AI Czar) set Crypto Twitter ablaze by announcing that Trump had officially established a Bitcoin Strategic Reserve (BSR)—a move long anticipated by the market. But instead of fireworks, the reaction was more of a dud. Here’s why:
1?? No New BTC Buying Spree – The reserve will simply hold the 198K BTC the U.S. government already owns, with no immediate plans for fresh purchases. Translation? No instant market impact.
2?? Budget-Neutral Acquisitions – More Bitcoin will be acquired, but the how and when remain as clear as a Magic 8-Ball’s predictions.
3?? A ‘Digital Asset Stockpile’ – Other seized crypto assets will be added to a separate pool, and those can be traded (read: potentially sold).
The market initially pumped for all of one minute, sending BTC to $90K, before reality set in—no near-term buying meant no fuel for an immediate rally. A stock market rout didn’t help, and BTC tumbled down to $76.5K within days.
Silver lining? These price drops created excellent buying opportunities, and we DCA’d down from $80K—because if history teaches us anything, it’s that fading short-term market panic is often the best trade.
Last week, we dove deep into the state of the crypto market and the generational shift we’re witnessing. If you’re in this game for the long haul (and not just rage-quitting after a few red candles), this is a must-read. While many are heading for the exits, the real ones are staying, adapting, and finding new edges. Check it out below! ??
ETF and crypto trading volumes have also plunged, with daily volume dropping 63% from February’s $440B peak to $163B.
Market Mood: Doom, Gloom, and... Opportunity?
Right now, sentiment in the market is about as cheerful as a Monday morning without coffee. Fear is running high, uncertainty is peaking, and traders are struggling to find an edge. But as long-term investors and HODLers, we see opportunity in the chaos.
?? The Macro Controls Everything – Crypto isn’t moving in a vacuum; it’s entirely tethered to macro trends and the stock market. With the S&P 500 down 10% in a month, a relief rally seems overdue—and if equities bounce, BTC is likely to follow.
?? Tariffs & Trump Are Running the Show – We’re in a headline-driven market, where tariffs and trade wars dictate daily price swings. Trump has made it clear that pumping the stock market isn’t his priority, which explains the panic in TradFi.
?? Risk-Off Mode Engaged – In this environment, smart trading means: ?? Fewer trades – Only the best setups. ?? Smaller positions – Preserve capital. ?? No FOMO trading – Chasing pumps is a death trap.
The current climate may be rough, but it’s precisely in moments like these that long-term opportunities emerge. Stay patient, stay sharp, and let the market come to you.
ARTIFICAL INTELLIGENCE
AI ZEITGEIST OF THE WEEK
MANUS MANUS MANUS - This week it was Manus, Manus, Manus.
Imagine an AI so exclusive that invite codes sold for $10K—basically the AI equivalent of a black Amex. We took it for a spin, and it’s got that “just works” magic, effortlessly handling requests without making you overthink the process. Of course, it’s still prone to tantrums—freezing up, crashing browsers, and overloading servers. But glitches aside, this is a sneak peek into AI’s future—and it’s looking wild.
May your Monday be filled with coffee & profits.
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