Survey Of Key Market Fundamentals

2025-05-28 01:30:00 ET

Summary

• Seven weeks ago, global markets were staring into the abyss, reeling from Trump's tariff onslaught. Some degree of calm has since been restored.
• Flush with reserves, bank balance sheets are relatively strong, and the banking system has plenty of rock-solid liquidity.
• Credit spreads are only modestly elevated, which means that the market is reasonably confident in the outlook for the economy and corporate profits.
• Private sector leverage today is an order of magnitude less than it was at its peak in 2008. This makes the economy much more resilient and able to withstand unexpected stresses.

So far, the year 2025 has been pretty wild, not least because of Hurricane Trump. I'm not the only pundit that has been struggling to make sense of things. Seven weeks ago, global markets were staring into the abyss, reeling from Trump's tariff onslaught. Some degree of calm has since been restored, and even Trump is licking his wounds....

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