Julien Bittel's Macro Seasons Framework

Julien Bittel is a macro strategist known for his "Macro Seasons" framework—a practical approach that organizes the business cycle into four distinct phases for asset allocation.

This article explains his core ideas and how VantMacro incorporates seasonal thinking into regime analysis.

Disclaimer: This is educational content explaining Bittel's publicly stated views. It is not investment advice or an endorsement of any specific strategy.

Who is Julien Bittel?

Julien Bittel is the Head of Macro Research at Global Macro Investor and a contributor at Real Vision. His work focuses on:

• Business cycle analysis and leading indicators
• Quantitative macro strategies
• Bitcoin and crypto market cycles
• Liquidity-driven investing

His influence comes from rigorous, data-driven analysis combined with clear communication of complex macro concepts.

---

The Macro Seasons Framework

Bittel's framework divides the business cycle into four "seasons" based on the direction of growth and inflation:

🌱 Macro Spring (Growth ↑, Inflation ↓)

Economic conditions:

• Economy recovering from recession
• Inflation falling or low
• Central banks easing, financial conditions improving

Asset implications:

• Early-cycle risk-on positioning
• Favor: Cyclicals, crypto, growth equities
• Avoid: Defensives, long duration bonds

Narrative: "Reflation Trade" — Economy recovering, policy supportive

---

☀️ Macro Summer (Growth ↑, Inflation ↑)

Economic conditions:

• Strong economic expansion
• Inflation rising toward or above target
• Liquidity still supportive but peaking

Asset implications:

• Mid-cycle positioning
• Favor: Commodities, emerging markets, inflation-sensitive sectors
• Avoid: Long duration, rate-sensitive assets

Narrative: "Mid-Cycle Expansion" — Strong growth, rising inflation pressures

---

🍂 Macro Fall (Growth ↓, Inflation ↑)

Economic conditions:

• Growth slowing from peak
• Inflation sticky or elevated
• Central banks tightening (raising rates, QT)

Asset implications:

• Late-cycle defensive positioning
• Favor: Defensive sectors, real assets, short duration
• Avoid: Cyclicals, high-beta assets

Narrative: "Stagflation Risk" — Slowing growth with persistent inflation

---

❄️ Macro Winter (Growth ↓, Inflation ↓)

Economic conditions:

• Recession or sharp slowdown
• Inflation falling (demand destruction)
• Policy pivoting to easing

Asset implications:

• Maximum defensive positioning
• Favor: Bonds, USD, late-cycle defensives, cash
• Avoid: Equities, credit, commodities

Narrative: "Recession / Deflation" — Contraction, policy pivot incoming

---

Liquidity as the Master Variable

Bittel's core thesis: "It always comes back to liquidity."

Empirical Relationships

Bittel (and similar “liquidity-first” frameworks) often cite strong historical co-movement between liquidity measures and risk assets. The exact magnitude depends heavily on:

• the liquidity definition (M2 vs central bank balance sheets vs net-liquidity adjustments),
• the lag choice,
• and the sample window.

VantMacro’s own regressions find substantial in-sample explanatory power for liquidity on price levels (high R² in log-level regressions), but much weaker relationships in change specifications. Treat correlation claims as hypotheses to test, not constants.

The Bittel Liquidity Stack

Bittel conceptualizes liquidity in three layers:

1. Base Layer: Central Bank Balance Sheets

• Fed, ECB, BoE, PBoC, BoJ
• The foundation of global liquidity

2. Middle Layer: Monetary Aggregates

• M2, M3 money supply measures
• Reflects credit creation and money velocity

3. Top Layer: Credit Conditions

• Bank lending, credit spreads
• Stablecoin growth (for crypto markets)

Investment Rule

When 2/3 of these layers are expanding: Maintain risk-on exposure When 2/3 are contracting: Reduce risk When all 3 are expanding: Maximum conviction

---

Lead Indicators Over Lagging Data

Bittel emphasizes forward-looking indicators over backward-looking economic data.

Lead Indicators (Use These)

Lagging Indicators (De-emphasize)

Why It Matters

Markets discount the future, not the past.

By the time unemployment is rising, markets have already priced in the recession. Watch what's happening to liquidity and forward surveys now to position for what's coming in 6-12 months.

---

Positioning by Season

Bittel's framework provides clear positioning guidelines:

Rotation Strategy

The key insight is that different asset classes lead in different seasons:

• Spring: Cyclicals, small caps, emerging market equities, crypto
• Summer: Commodities, energy, materials, emerging markets
• Fall: Defensives, utilities, gold, cash
• Winter: Treasuries, USD, quality bonds

---

How VantMacro Uses This

VantMacro's seasonal framework is directly inspired by Bittel's work:

Implementation

1. Growth assessment: CFNAI level and momentum
2. Inflation assessment: CPI YoY level and momentum
3. Season classification: Based on the 2x2 matrix (growth direction × inflation direction)

Code Logic (Simplified)

if growth_rising and inflation_falling:
    season = "spring"
elif growth_rising and inflation_rising:
    season = "summer"
elif growth_falling and inflation_rising:
    season = "fall"
elif growth_falling and inflation_falling:
    season = "winter"

VantMacro Additions

VantMacro extends Bittel's framework with:

• Integration with the 7-state regime model (liquidity + risk dimensions)
• CFNAI-based thresholds for growth state
• CPI-based thresholds for inflation state
• Momentum indicators for slope detection

View Economic Indicators →

---

Criticisms and Nuances

1. Seasons Aren't Always Clear

The economy doesn't move smoothly from spring to summer to fall to winter. Mixed signals are common, and transitions can be abrupt.

2. Global vs Regional

The framework works best for U.S. macro. Other regions (Europe, China, emerging markets) can be in different seasons simultaneously.

3. Timing Is Imprecise

Knowing the season doesn't tell you exactly when it will change. Leading indicators help, but timing remains uncertain.

4. Regime Overlap

"Macro Fall" and "Stagflation" describe similar conditions. Don't over-index on labels; focus on the underlying data.

---

Key Takeaways

1. Four seasons — Spring (recovery), Summer (expansion), Fall (late-cycle), Winter (recession)

2. Growth + Inflation — Two axes determine the season

3. Liquidity is master variable — Underlies all seasons; watch M2, central bank balance sheets, credit conditions

4. Lead indicators over lagging — Markets discount the future; use forward-looking data

5. Rotate by season — Different assets lead in different phases

---

Data Sources

• Primary framework sources: Julien Bittel's public research and presentations (Global Macro Investor / Real Vision) describing the "Macro Seasons" concept.
• Macro time series used to operationalize the framework on VantMacro: standard U.S. growth and inflation indicators (e.g., Chicago Fed National Activity Index and Consumer Price Index via FRED).

Methodology

• Summarizes the “growth direction × inflation direction” season mapping and shows how the labels can be operationalized with observable macro series.
• Uses the framework as a classification lens (what conditions look like), then layers in liquidity and risk to avoid single-factor narratives.

Limitations

• The “season” mapping is a heuristic; real economies often show mixed signals and fast transitions.
• Choice of growth/inflation proxies and thresholds materially affects classification, especially around turning points.
• Framework alignment does not guarantee asset performance; it is context for risk management, not a trading rule.

Further Reading

• Understanding Business Cycles — Detailed guide to cycle phases
• Raoul Pal's Everything Code — Complementary liquidity framework
• The Complete Guide to Global Liquidity — How to track liquidity

---

See Seasonal Analysis on VantMacro

VantMacro's dashboard includes:

• Current season classification
• Growth and inflation gauges
• Season-appropriate positioning guidance
• Integration with regime analysis

Explore Indicators Dashboard →