Running Hot Regime dormant
Running Hot Regime is a macro theme formerly tracked by Themic. Stifel's named regime call: the US entering 'a period of persistently high inflation AND strong economic growth' — distinct from stagflation (weak growth) and goldilocks (inflation normalising). The theme went dormant after 2026-06-24 and is no longer actively updated; its dated ledger is preserved below as an archive.
Thesis (as of 2026-06-24)
Stifel's named regime call: the US entering 'a period of persistently high inflation AND strong economic growth' — distinct from stagflation (weak growth) and goldilocks (inflation normalising). Mechanism: nominal growth + sticky inflation keeps the yield leg elevated while supporting nominal earnings, favouring pricing-power / nominal-growth sectors (energy, financials, materials) over software/semis. Sits in direct tension with Bessent's 'inflation coming down' and macro commentators' disinflation-driven rate-cut thesis. Bears on ZN (bear if it materialises), SR3 (bear lean), ES (sector rotation — multiple-compression risk vs nominal-earnings support).
Development timeline
- Intraday Jun 24 PM: a SECOND independent voice corroborates the regime — Apollo (via Bond Beat) 'The Narrative in Markets Is Changing' now positively correlates rates and oil (lower oil → demand → overheating → hikes), the same nominal-growth-plus-sticky-inflation frame as Stifel, no longer a single source. Hard demand prints back it: Redbook same-store sales +10% YoY (strongest since end-2022), June flash Mfg PMI 55.7 (11th straight expansion, MS tracking ISM 54.0), upper-income savings elevated. Countered by macro commentators/ING/UBS/SocGen ('hikes overdone', Fed on hold 2026-27).Sources: Apollo, independent channels