Global Financial Markets

Long-term interest rates are rising, while governments' interest burdens are crowding out spending on future growth and politics is too divided to step in. Meanwhile, the AI-investment boom is keeping the economy afloat, but it relies heavily on borrowing. In this report, we explain why markets are too optimistic about AI and what this means for the major interest rates, currencies and equity markets.
 

Interest rates are rising, government deficits are growing and tensions around France are building. This is no coincidence: it is the result of years of debt-driven growth as a response to cheap imports from China. In this report we explain why this build-up of debt is now stalling, what a possible way out looks like and what this means for the main interest rates, currencies and equity markets.

For years, inflation was low, allowing central banks to pursue an increasingly loose monetary policy and drive up the prices of real estate, equities, and bonds. Now that China's rapid development and the rise of new technology are rapidly reshaping the world order, this era is coming under pressure and structural weaknesses in the West are being exposed. In this report, we explain why this foundation is faltering and what it means for the key financial markets.