Ark Cathie Wood's favorite bull run is here! A comprehensive overview of Ark Invest's latest macroeconomic report.

ARK Invest (ARK Invest) founder Cathie Wood revealed this morning 7/4 on her channel that the United States is preparing for a "Rolling Recovery" (Rolling Recovery), and the bull run structure has quietly formed. At the same time, she also analyzed the Federal Reserve (Fed), the deficit, and the impact of AI on the job market, stating that inflation is clearly cooling down.

The rolling recession is not over yet, housing market and employment data are weak.

Wood stated that the U.S. economy has been experiencing "alternating recessions" in recent years, with sectors like manufacturing, real estate, and small businesses taking turns suffering. Data shows that consumer confidence and the housing market have once again weakened, with both new and existing home sales dropping to historic lows. Meanwhile, the job market is also starting to show signs of weakness. Wood used the example of the "total sales volume of new and existing homes in the U.S." to illustrate this point:

"The U.S. housing sales will only reach 4.65 million units by mid-2025, close to the low point after the financial crisis. Even with a significant population increase, housing sales remain sluggish, reflecting that the housing market is being pressured by high interest rates and prices."

She pointed out that the housing market is currently affected by high interest rates, and although prices have fallen, it is still not enough, leading to sluggish transaction volumes. Employment data shows a dichotomy; the government sector has added a considerable number of job opportunities, while private enterprises have only increased by 74,000 job vacancies, and the ADP report even indicates that small businesses have collectively laid off 33,000 employees.

Housing prices are starting to loosen, and crypto assets can be used to apply for a mortgage.

Cathie pointed out that although home sales are nearing the lows seen during the financial crisis, builders are starting to offer interest rate subsidies, and home prices are beginning to gradually decline. The situation where homeowners were reluctant to sell due to low interest rate loans, which led to prices being propped up and not falling, is also starting to ease.

Interestingly, the latest policy from the Federal Housing Finance Agency (FHFA) allows the inclusion of crypto assets held in U.S. regulated exchanges like Coinbase into mortgage qualification, which is expected to increase homeownership rates among the younger population.

(Big Short? The Federal Housing Finance Agency in the United States has listed cryptocurrency as a risk collateral for mortgages)

Inflation may fall below 2%, and deflation may occur in the future.

Cathie expects that inflation in the United States will significantly decline due to weakening housing prices and increased productivity, possibly dropping below 2% before the end of the year, and even briefly experiencing deflation. She emphasized: "Many people are worried about a repeat of the inflation of the 1970s, but the current economic momentum is completely different."

She also pointed out that there is a lag effect in the rental component of the CPI composition, which will continue to put downward pressure on inflation data in the coming months.

The inversion of the yield curve between long-term and short-term bonds suggests that the Federal Reserve (FED) is likely to cut interest rates.

Wood pointed out that although the annual growth rate of M2 money supply has risen to 4.5%, it is still considered a low level. From the perspective of short-term interest rates, the yield curve between the 90-day and two-year Treasury bonds remains inverted, indicating that the Fed's policy may be excessively tight. She also mentioned that Fed Chairman Powell recently hinted:

"If there were no pressure from tariffs, perhaps we could already start to lower interest rates."

This suggests that the Fed also believes interest rates may be too high.

(The Federal Reserve (FED) predicts two rate cuts this year, with interest rates remaining unchanged. Powell: Still need to observe the impact of Trump's tariffs)

"Big and Beautiful" boosts foreign investment and reduces tax burden on US companies.

Speaking of fiscal policy, Wood predicts that the House of Representatives will pass the "Big and Beautiful" tax cut bill after the vote, especially the provision that "corporate capital expenditures can be fully deducted" is expected to be included in the bill. Wood uses the following chart as an example, stating:

"In recent years, tax rates have significantly declined, and under the 'Big and Beautiful' tax reduction plan, the effective tax rate for U.S. companies will be reduced to 14-15%."

It is believed that this has an important incentive effect on boosting foreign investment and capital expenditure, and also helps with economic recovery.

AI significantly impacts employment rates, and industries are entering a painful transformation period.

Wood emphasized that AI is accelerating the industry's "transformation pain period," where costs and prices are declining, but output has significantly increased. She used ARK as an example, stating that internally they have used generative AI to implement 13 development projects, work that used to require outsourcing can now be completed in-house.

But she also admitted that AI has indeed had a real impact on the job market. For example, the employment rate of university graduates has reached about 6.3% currently, higher than the previous level of 4%. She urged young people and job seekers to quickly learn AI to avoid being eliminated from the market.

The consumption and service industries are beginning to weaken, and the economy is cooling down.

Cathie believes that although the overall GDP performance still appears to be robust, it is actually supported by the government and high-income groups. She uses the chart of "real personal consumption after deducting medical expenses" as an example, stating:

"Growth has slowed in the past two years, maintaining a level of 2-3%, indicating weak consumer momentum and a cooling economy."

Immediately following, Wood uses the trend chart of "U.S. services and order volume" as an example, stating:

"The recent price index remains high, but new orders have continued to decline, approaching the boom-bust line of 50, indicating weakened demand and a diminishing support of inflation for the service industry."

The US dollar hasn't collapsed yet, and the rise in copper prices is a good phenomenon.

Regarding exchange rates and raw materials, Wood believes that although the dollar has performed poorly this year, it is still relatively strong compared to other countries' currencies, as can be seen in the chart below:

"Although there is a decline in 2025, it still remains at historically relatively high levels, and no market crash that causes concern has occurred."

The rise in copper prices is mainly driven by the demand from AI data centers and electric vehicles, indicating that the real economy remains vibrant. She also emphasized that the yield on the U.S. 10-year Treasury bonds remains high, which suggests that the market's tolerance for risks related to deficits and tariffs is still high.

Bitcoin and US stocks are holding up under pressure, still in a bull run.

Finally, Wood emphasized that Bitcoin (BTC) and the US stock market both show resilience. Despite the impact of Middle Eastern conflicts, tariff policies, and inflation concerns, the market continues to reach new highs. She used the price ratio of BTC to gold as an example to illustrate this:

"The value of BTC relative to gold has reached 33 times this year, reflecting that the market increasingly views BTC as an anti-inflation asset."

She pointed out that this bull market is not solely driven by technology stocks, but rather a broad-based rally, and she stated: "This is our favorite bull run structure."

( Ark Invest | From "Rolling Recession" to AI Productivity Revival: Is the US Economy Brewing a Structural Reversal? )

This article, Ark, Cathie Wood's favorite bull run is here! Grasp the latest macro report from Ark Invest in one article. Originally appeared in Chain News ABMedia.