Markets, Fed Signals, and the Energy Policy Wrecking Ball
NVIDIA Delivers. The Fed Waits. Congress Cuts Clean Tech.
NVIDIA earnings took center stage. Powell stayed steady. Trump swung a hammer at clean energy. And bond investors in the U.S. and Japan are getting nervous for very different reasons.
Welcome back to MacroMashup—the sharpest 7-minute read in macro. No fluff. Just signal.
NVIDIA: The New Fed Day for Tech?
Forget Powell, Wall Street’s real Fed Day this week was NVIDIA’s earnings call.
Revenue: $44.06B, up 69% YoY
Gross profit: $26.7B (60.5% margin)
Net income: $18.8B (including a $4.5B charge on Trump-era export restrictions)
Data center growth: +73%
Markets treated NVIDIA as a proxy for:
AI investment cycles
Big Tech capex
Global sentiment on semiconductors, especially China’s $50B AI market
Despite risks, implied volatility was down (-7.4%), well below historical norms (-11.4%).
CEO Jensen Huang = dynamic signal.
Trump = chaotic noise.
Powell = steady… but surprisingly volatile.
(86% of S&P rallies follow rate cuts. Powell drives more volatility than his predecessors.)
Not Everyone’s Impressed by Powell
Former Dallas Fed insider Danielle DiMartino Booth argues the Fed is already behind the curve:
Recession began in Q1 2024 (according to her metrics)
Bankruptcies now match 2008 levels
Household delinquencies are spiking
Credit conditions are tightening
Small business sentiment collapsing
Her view:
Rates must drop to 2%—now
Fed should shift from lagging data to real-time metrics
Delays risk systemic damage
One take? Yes. A smart one? Absolutely.
Are Tariffs Really Inflationary? Not Always.
The common narrative says yes. The data says… maybe not.
Substitution & demand destruction keep prices in check
Trump-era tariffs = short-term supply shock, not long-term inflation
Goldman Sachs projects PCE inflation peaking at 3.5% in 2025, easing to 2.6% in 2026
But margins get squeezed. Labor takes the hit.
Breaking: The U.S. Court of International Trade just ruled that Trump overstepped his authority under the 1977 emergency law. Some tariffs will be unwound within 10 days.
Breaking (Part 2): A Federal Appeals Court allows tariffs to stay in effect…for now. Calling the Supremes.
Lousy Bond Auctions
Japan & U.S. Bond Investors are in a bad mood:
The 20-year and 40-year JGB (Japanese Government Bonds) auctions (May 2025) saw the lowest demand since July 2024, amid concerns over fiscal sustainability.
Yields surged: 20-year 2.56%; 30-year JGB yields hit 3.14%, while 40-year yields spiked to 3.6%**, all-time highs.
The U.S. is worse: 10-year yields are above 4.5%, and long-term yields (20- and 30-year) jump above 5%.
Same result, different reasons:
Net International Investment Position (NIIP): Structural Divergence
Japan = world’s largest creditor—owns $3.48 trillion more in foreign assets than foreign owns Japanese assets.
U.S. = world’s largest debtor—foreigners own $26 trillion more U.S. assets than the U.S. owns foreign assets.
It’s all about persistent trade surpluses for Japan and opposite for the U.S.
Japan’s Debt/GDP ratio is way higher than the U.S., but adjusting for the NIIP…
Japan’s problem?
Aging population.
Policy uncertainty.
U.S. problem?
Political gridlock.
Lack of political will to fix the deficit.
Running out of investors to buy its debt.
Bigger problem?
Declining confidence in USD and fiat systems.
China and BRICS are building BRICS Pay, which threatens the USD and SWIFT—it settles in 7 seconds.
Clean Energy Just Got Hit With a Sledgehammer
The House passed the One Big, Beautiful Bill—and it slashed many of the Inflation Reduction Act’s signature green incentives:
Clean Energy Production/Investment Credits:
Immediate termination, unless construction starts within 60 days of enactment and operation by 12/31/28.
Residential/Commercial Energy Credits
Expire for property placed in service after 12/31/25—ends third-party leasing.
EV Credits and Chargers
Ends for most EVs and chargers after 12/31/25—limited exception for some EVs until 12/31/26.
Advanced Manufacturing Credit (45X)
Phaseout by 2032.
Transferability ends after 2027.
Clean Fuel Credit (45Z)
Extended to 2031.
Stricter sourcing and emissions rules.
Transferability ends after 2027.
Nuclear Incentives (45U)
Maintained/enhanced.
No phaseout until 2031.
New "Foreign Entity of Concern" (FEOC) restrictions
Limit foreign ownership and control in U.S. clean energy projects, primarily targeting Chinese involvement.
Effective 1/1/26.
The bill now moves to the Senate, where substantial amendments are expected/hoped for—unless Trump can strongarm Senators too…
In the Markets: Who’s Right—Danielle or Darius?
Two respected voices. Two different reads on the economy.
Danielle DiMartino Booth
Sees hard data turning south: bankruptcies, job losses, loan delinquencies
Believes a recession already started
Advocates for urgent cuts
Darius Dale
Says soft data is noisy, but the hard data remains solid
Sees fiscal and monetary stimulus holding the floor
Follows a signal-based investment system, and puts money behind it
Lesson?
Without a system, you’re just reacting to headlines. And that’s a losing strategy.
If your only signal is your newsfeed or podcast queue, you’re trading blind.
Weekly charts + market data.
🎧 Want to hear both sides? We’ve linked Danielle’s and Darius’s latest interviews here:
How do you decide who’s right?
manages money, his own included, based on the signals his system provides. Here is his take. advises money managers. Check out her viewpoints here.Who Owes What To Whom
Market charts this week are largely “unch”: up, down, leadership changes, capital rotation etc.
This one, though, is worth a look. The blue line—massively negative at $26 trillion—is the net international investment position of the U.S. compared to the rest of the world.
America is truly exceptional…
Enjoyed this newsletter? Get Involved.
Subscribe to MacroMashup: one email a week, zero noise.
Book a call with Dakota Ridge Capital if you’re investing in clean energy or want to optimize for tax strategy
Collaborate with us at contact@macromashup.com
📤 Enjoyed this? Share it via LinkedIn, repost on X → here, or forward it via email.