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When the Fed lowered interest rates to zero in 2008, demand for $100 bills started growing faster than demand for $1 bills, and there are now more $100 bills than $1 bills in circulation, see chart below.
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Our latest outlook for private markets is available here.
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Immigration continues to be the key source of population growth in the United States, and the CBO estimates that net births will be negative in a few decades, see chart below.
For more discussion, see also this new paper.
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Fed hikes are increasingly impacting coverage ratios for highly leveraged companies, but the composition of coverage ratios remains similar to what we saw from 2012 to 2020, see chart below.
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The Fed’s inflation target is 2%, and the bottom line of the inflation discussion is that inflation has started to move sideways at 3%, and this is a problem for the Fed, see chart below.
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Container transportation prices are slowly coming down from their peaks, but IMF data shows that traffic volumes through the Suez Canal continue to deteriorate, see chart below.
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Annuity sales are almost double their pre-pandemic levels because of higher interest rates. And strong annuity sales create strong demand for credit, see chart below.
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The buyer base for US Treasuries has shifted from yield-insensitive buyers (sovereign wealth funds and central banks, including the Fed) to yield-sensitive buyers (US households, US pensions, US insurance), see chart below.
This may become a problem once the Fed begins to cut rates because that could mean less demand from the yield-sensitive buyers, ultimately resulting in a steeper yield curve.
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Canadian business insolvency filings have increased dramatically in recent months, see chart below.
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With no signs of a recession, commercial real estate prices are starting to recover, see chart below. This is helpful for the regional banks and for the broader economic recovery.
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