Global Developments: Healthcare funds are benefitting from sizeable inflows, in part due to the epidemic. But so are other risk assets.
The United States: The Fed’s accommodative monetary policy produced substantial asset inflation, while growth in “real economy” prices has been modest.
Also, one of the reasons for low volatility in financial assets has been the ongoing decline in the volatility of the GDP. Here is the standard deviation of annualized quarterly fluctuations in the US GDP (in percent).
The Eurozone: European banks’ effective financing costs have collapsed over the past decade.
Equities: Market implied volatility remains disconnected from economic policy uncertainty.
Credit: According to a Morgan Stanley survey, investors expect US investment-grade credit spreads to widen further this year.
Food for Thought: The US job quality index:
Edited by Devon Lall
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