Midcycle Optimism Driven by Fed Liquidity and Foreign Investment

2 months ago

Peter St. Onge

"I am broadly optimistic about the economy. I think we're in midcycle. I do not think we're in late cycle. The liquidity indicators – the M2, GDP ratio – are on fire. When you look at the macro, it's popular for a lot of commentators to say that the sky is always falling, but if you look at the big numbers, right now we're actually in a pretty good spot near-term. One of the biggest stories is that the Fed is no longer afraid of inflation; they've just ended QT, which means a burst of relative liquidity coming into the market. Add to that massive foreign investment and explosive growth in AI capabilities, and you have a recipe for near-term growth despite long-term fiscal concerns."

Peter expresses a broadly optimistic view of the near-term economy despite acknowledging long-term fiscal challenges. He emphasizes that liquidity is booming as QT ends and major foreign investments are on the horizon, alongside rapid advances in AI, positioning the economy favorably in the midcycle phase.

Related Stocks