More attractive risk premium for US government debt

11 Dec

More attractive risk premium for US government debt

Posted by BearBull Group In Weekly Analysis 0 comment

Economic momentum slows. Weakened employment and consumption. Priority to growth. Unavoidable continuation of deficit monetisation. Rising earnings for equities.

Key Points

GDP momentum expected to slow sharply in Q4
Employment remains fragile and could penalise
consumption.
The four priorities of the new US president
Rising government deficit and risks of structural
depreciation of the US dollar
Post-Covid debt financing implies further
monetisation of new issuance
The Fed can only stay the course
The rise in long-term rates increases the relative
attractiveness of the bond market
Exceptional rebound in corporate profits

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