Measures of M&A activity are approaching the lowest levels in decades, driven by the double whammy of high uncertainty for business planning and interest rates staying higher for longer.
The weak M&A environment will continue.
Why? Because unsustainable fiscal policy is putting upward pressure on long-end rates, while inflation is putting upward pressure on front-end rates, driven by tariffs, reduced immigration, and housing affordability boosting rental inflation.
The bottom line is that fixed income will continue to pay higher all-in yields to asset owners of credit.
Note: Data uses completed M&A deals from MA<GO> screen on Bloomberg. Sources: Bloomberg, Apollo Chief Economist
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