Summary

• The administration has committed to an "Easy Street" path of easy monetary and fiscal policy, aiming to stimulate the economy despite potential risks of weaker growth.
• The author is rebalancing his thematic portfolio, which was previously "well balanced" and flat, to explicitly favor this "Easy Street" environment.
• Key shifts include advocating for US yield curve steepening, a long position in US stocks relative to US bonds, and a short position on the US Dollar.
• The author expresses regret over holding a long-gold view, indicating a shift away from assets perceived as "mania" plays.

=== MARKET IMPLICATIONS === - Interest Rates & Bonds: Expect upward pressure on long-term US Treasury yields relative to short-term yields (steepening yield curve). This implies a bearish outlook for long-duration US bonds. - Equities: US equities are favored over bonds, suggesting an environment conducive to risk assets, potentially driven by economic stimulus and inflation expectations. Growth-oriented sectors and cyclicals could benefit. - Currency: A weaker US Dollar is anticipated, likely due to increased inflation expectations, potentially lower real yields, or a relative decrease in the dollar's safe-haven appeal. This could benefit US exporters and potentially commodity prices (though gold is out of favor). - Inflation: The "Easy Street" policy path strongly implies increased inflation expectations, which underpins the preference for stocks over bonds and a weaker dollar. - Asset Allocation: A clear shift from balanced/defensive positioning (like gold) towards more aggressive, growth-oriented, and inflation-sensitive assets within the US market.