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Much to the frustration of the quant community, when the Fed started raising interest rates in 2022, the strong correlation between gold and real rates broke down, see chart below.
It tells the market that when inflation and rates are high, investors begin to take other factors into consideration when they price future outcomes, and this has been particularly pronounced for the price of gold. In other words, quant models work best when inflation is stable at 2%, but this has not been the case since early 2021.
The bottom line is that new risks emerge when inflation is persistently above the Fed’s 2% target, which is where we continue to be today.
Sources: Bloomberg, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The problems in software will not become a macro problem because the underlying US economy is about to take off.
There are three strong tailwinds to growth over the coming quarters:
1. Many financings for data centers have already been committed for 2026.
2. There is strong political support for bringing back production facilities for semiconductors, pharmaceuticals and defense.
3. Fiscal policy is expansionary and will, according to the CBO, lift GDP growth this year by 0.9 percentage points.
The bottom line is that it is very difficult to be bearish on the US economic outlook, and later this year the conversation in markets will change from talking about Fed cuts to instead talking about the Fed having to hike.
If the Fed is unwilling to hike in response to an overheating economy, it would increase the risk of higher long rates, a steeper curve and a lower dollar.
Source: Apollo Chief Economist See important disclaimers at the bottom of the page.
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Most of the time in financial markets is spent on discussing Nvidia, Apple and Coca-Cola, but these firms and the rest of the S&P 500 companies only make up a very small part of the US economy, see our chart book available here. For example, employment in S&P 500 companies is only 18% of total US employment. Similarly, capex by S&P 500 companies is only 21% of total capex in the US economy.
Facts about public markets and private markets
- Employment in S&P 500 companies is 18% of total US employment
- Employment in firms with more than 500 employees is 24.9 million, and total US employment is 160 million
- Privately owned firms account for almost 80% of job openings
- 81% of firms with revenues greater than $100 million are private
- Less than half of all corporate debt outstanding is from S&P 500 companies
- S&P 500 profits make up roughly half of economy-wide corporate profits
- Capex by S&P 500 companies is 21% of total capex in the US economy
Bottom line: Public markets are a small part of the overall economy.
See important disclaimers at the bottom of the page.
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US GDP growth is accelerating because of the One Big Beautiful Bill, the AI boom and the ongoing industrial renaissance. As a result, inflation pressures are building, driven by higher wages, higher commodity prices and a weaker dollar, see charts below.
Note: Fed survey indicator is the average of New York Fed, Philadelphia Fed, Dallas Fed, Kansas City Fed and Richmond Fed surveys. Sources: US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist 
Sources: BLS, Commodity Research Bureau, Bloomberg, Macrobond, Apollo Chief Economist 
Sources: Federal Reserve, US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Korean export growth has been driven by strong demand for semiconductors and autos, see chart below.
Sources: Bloomberg, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Tourism into Australia has been increasing. The number of visitors is now above pre‑pandemic levels for New Zealand, the UK and Japan, but not for China, the US and Singapore, see charts below.
Sources: Australian Bureau of Statistics, Macrobond, Apollo Chief Economist 
Sources: Australian Bureau of Statistics, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The share of Chinese exports going to the US has declined to 10%, down from 20% in 2018, see chart below.
Note: Data is six-month moving average. Sources: China General Administration of Customs (GAC), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Bank balance sheet data show that yen lending to offshore financial centers and non-bank borrowers remains elevated, suggesting a large stock of yen-funded positions, see the first two charts.
By contrast, speculative futures positioning has swung sharply, highlighting that carry trades can unwind quickly even as the broader yen-funded footprint remains in place, see the third chart.
Sources: BIS, Haver Analytics, Apollo Chief Economist 
Sources: BIS, Haver Analytics, Apollo Chief Economist 
Sources: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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GDP in Venezuela is roughly 70% lower than in 2012, see chart below.
Sources: World Bank, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Data from the Yale Budget Lab shows that the US average effective tariff rate is currently roughly half of the level seen in April 2025, see chart below.
Sources: The Budget Lab at Yale, Apollo Chief Economist See important disclaimers at the bottom of the page.
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