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Rising home prices and high mortgage rates have pushed the median age of homebuyers to a record-high 56 years old in 2024, up from 45 in 2021.
In 1981, the median age of homebuyers was 31 years old, see chart below.
Source: NAR Profile of Home Buyers and Sellers, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Total revenue raised from income taxes is currently around $3 trillion, and total imports into the US are also around $3 trillion, see chart below.
This means that tariffs would have to be at least 100% on all imported goods for tariffs to replace income taxes.
The challenge is that it is unclear what will happen to sales if all imported products double in price. Given higher prices result in lower sales, it may require as much as 200% tariffs on all imported goods for the total tariff revenue to replace income taxes.
In addition, such a scenario would also involve significantly higher prices of cars, computers, electronics, imported medicine, clothing, shoes, imported energy, etc. for US consumers.
The bottom line is that it is challenging to replace income taxes with tariffs, and higher tariffs will have implications for consumer prices and consumer demand for imported goods.
Note: Data for 2024 for GDP, goods imports, and income tax. Source: BEA, OMB, Haver Analytics, US Customs and Borders Protection, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Below are some questions I have been getting from clients recently. All risk managers should be asking themselves these questions.
Source: Apollo Chief Economist See important disclaimers at the bottom of the page.
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We are watching the weekly data for the number of people who file for unemployment benefits in Washington DC, Maryland, and Virginia, and any impact federal government layoffs may have on nationwide jobless claims, see chart below. This data comes out every Thursday at 8:30 a.m. ET.
Source: US Department of Labor, Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The outlook for Spain continues to improve, and the outlook for Germany continues to deteriorate, see charts below.
Source: German Federal Statistical Office, Bloomberg, Apollo Chief Economist 
Source: INE, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The average age of passenger cars on the roads in the US continues to rise, see chart below.
Source: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The data this week shows that the economy remains strong.
Consumers are in good shape, and year-over-year retail sales show steady growth, see the first chart below. Capex spending plans are improving, see the second chart, and the Atlanta Fed GDP estimate for first quarter GDP and the Dallas Fed weekly estimate for GDP are at 2.3% and 2.5%, respectively, see the third and fourth chart.
We are carefully monitoring trade war uncertainty, but so far, there are no signs that it is having a negative impact on the incoming data, see the fifth chart.
Source: Census Bureau, Haver Analytics, Apollo Chief Economist 
Source: Business Roundtable; NFIB; Federal Reserve Bank of Philadelphia, Dallas, New York, Kansas, and Richmond; Apollo Chief Economist 
Source: Federal Reserve Bank of Atlanta, Haver Analytics, Apollo Chief Economist 
Source: Federal Reserve Bank of Dallas, Bureau of Economic Analysis, Apollo Chief Economist 
Source: PolicyUncertainty.com, Haver Analytics, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Almost all returns in the 60/40 portfolio come from the stock market, see chart below. When the stock market goes down, there are years when Treasuries are not the correct hedge against downside risks in the S&P 500, including in 2022.
Asset allocation has evolved significantly since the 60/40 portfolio was invented in the 1950s, and investors are now asking more nuanced questions about fixed income replacement and equity replacement, with a focus on less concentration in the S&P 500, lower volatility in returns, and less need for daily liquidity, see also here.
Source: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Inflation is moving higher, inflation expectations are moving higher, and breakevens are moving higher, see charts below. If the Fed cuts interest rates too early, it increases the likelihood that we will see a repeat of the 1970s. The Fed has no other options than to keep interest rates higher for longer.
Source: Bloomberg, BLS, Apollo Chief Economist 
Source: BLS, Haver Analytics, Apollo Chief Economist 
Source: BLS, Haver Analytics, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The share of equity trading volume on the exchanges is now smaller than the share of equity trading volume in dark pools, negotiated trades, and internalized trades, see chart below.
Note: Off-exchange trading activity is Trade Reporting Facility (TRF) trading volume. All trades executed otherwise than on an exchange is reported under TRF. Examples include dark pools, negotiated trades, and internalized trades. Source: Bloomberg, FINRA, Apollo Chief Economist See important disclaimers at the bottom of the page.
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