Strong Tailwind to Stocks and Credit

Apollo Chief Economist

One way to measure liquidity is to add bank reserves and money market assets, see chart below which shows that there is record-high liquidity to push stock prices higher and credit spreads tighter. In particular, once the Fed starts lowering interest rates, some of the $6 trillion in money market funds is likely to find its way into stocks and credit.

Record-high liquidity to support equity and credit markets
Source: ICI, FRB, Haver Analytics, Apollo Chief Economist

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