Excess Returns · Thursday, August 6, 2026
Chan Yang explains that the recent decline in the macro risk indicator, from around 70 to 40, is attributed to policy tightening and economic slowing. He views this trend as a normalization of the market, leading to a potentially more balanced and resilient market going forward.
“You guys boil this down to a macro risk indicator, which I think is very, very cool. Um, and we're going to put up the chart here of the macro risk indicator.”
“You said that's kind of been driven by a lot of the policy tightening and the economy kind of slowing down. Can you talk about that?”
“Yeah, so, you know, when we think about the macro risk indicator, it's obviously going to be a combination of all the factors that we've discussed. So, you know, you have growth, inflation, policy, liquidity, right?”
“And, you know, obviously, as we've seen, you know, monetary policy has been tightening, interest rates have been going up, inflation has been coming down. And, you know, obviously, the economy is starting to slow.”