I tend to be a pretty bottom-up guy and thus tend to view macro-yack as something to read with the World Cup or the like in the background. Or vice-versa.

But these people have been interesting, factual and actually right for 38 years on a macro-basis: interest rates had peaked in 1982-ish and were about to enter a very long secular decline.

And they created the world’s greatest money management industry work-life balance: wake up, come into office, buy 30 year US Treasury Strips, go home for 364 days, and come in and extend the maturity back to 30 years.  Rinse and Repeat. Close to a 10% annualized rate of return for 38 years. Not so obviously good for the past 6.

Now I have read their quarterlies for years, and yes, I was really rooting for them to pull the plug in 2020 with rates negative or near zero across the world. No one’s perfect.

But here they are in Q2 2026 pulling the plug and it’s thoughtfully obvious: THIS IS OVER.

The structural inflation outlook can be understood through the standard economic production function, where output is determined by labor, capital, technology, natural resources, and productivity growth. Following the collapse of the Iron Curtain and China’s integration into the global trading system, the world experienced one of the largest positive supply shocks in modern economic history. Hundreds of millions of low-cost workers entered the tradable global economy, multinational firms gained access to increasingly integrated global supply chains, and production became concentrated in large manufacturing hubs that generated substantial economies of scale. At the same time, falling capital costs, low-cost energy, and rapid technological diffusion reinforced productivity growth and expanded Quarterly Review and Outlook Second Quarter 2026 productive capacity. Together, these forces shifted the aggregate supply curve outward, allowing the United States and other advanced economies to grow while inflationary pressures eased. The result was persistent disinflation in goods prices, downward pressure on wages in developed economies, lower inflation volatility, and an expanded capacity to absorb debt and liquidity without generating sustained pricing pressure.

There will be plenty of cycles over the next 38 years in which to make or lose fortunes. But higher for longer seems like the right side of things if you are in a position of having to choose. And, within the context of the proverbial context of all else being equal, it is a negative for equities.