Forward Guidance Markets Are Misreading A Late Cycle Liquidity Crunch | Michael Howell
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Apr 22, 2026 
Michael Howell, founder of CrossBorder Capital and liquidity-cycle expert. He argues global liquidity is turning lower and outlines why the liquidity cycle diverges from the business cycle. Discussion covers yield-curve dynamics, Treasury-driven liquidity and bond volatility. He also maps late-cycle signals to commodities, crypto, and positioning ahead of potential turbulence.
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Global Liquidity Is Inflecting Lower
- Global liquidity is inflecting lower and drives market regimes, currently in a late-cycle speculation (autumn) heading toward turbulence.
- Michael Howell links falling financial liquidity to rising real-economy working capital demand, not just central bank tightening.
Liquidity Cycle Leads The Business Cycle
- Liquidity and the business cycle are out of phase with a ~15–20 month lag; financial liquidity leads and the real economy follows.
- Howell defines global liquidity as money in financial markets (repo, shadow banking, asset-side credit capacity) distinct from M1/M2 real-economy liquidity.
Market Internals Signal Economic Strength
- Current survey and market internals point to a strengthening world business cycle despite recent geopolitical shocks.
- Howell shows ISM new orders, Philly Fed and cyclicals vs defensives all signalling economic pickup rather than immediate recession.