Inflation
This is the Fed's target inflation mandate
2%
This is the current federal funds target rate (range)
5.25%-5.50%
For the 10 years ended in Q3 2023, bonds have posted annual returns of this percent
1%
Today's U.S. equity forward P/E multiple (range)
18x-20x
By 2025, approximately this dollar amount of commercial real estate debt will mature.
$2 trillion
In the United States, inflation fell from over 9% to roughly this number today
3.5%
In the U.S., clients are allocated to Treasuries and money markets this much more than their international peers
2x (or 100% more)
Over the next 10-15 years, JPM's LTCMAs project that core bonds will deliver this annual return
5%
On a 10-year basis since 1950, equities have outperformed bonds this % of the time
85%
In corporate credit, this sector is under particular stress, accounting for more than a quarter of all corporate credit defaults YTD.
Healthcare
U.S. wage growth (ECI) has slowed from over 6% to roughly this number today
4%
Markets think the Fed, ECB, and BOE could lower interest rates as soon as this month
March 2024
Cumulative default rate of municipal bonds over 10-year periods since 1970
0.1%
R&D budgets for the top 5 tech companies have eclipsed this yearly dollar amount (approaching the U.S. government's own R&D spending)
$200 billion
A historical anomaly, default rates in this asset class are currently higher than they are for U.S. high yield bonds
Leveraged Loans
YTD, of the 3mm+ new jobs in the U.S., foreign-born workers accounted for roughly this percentage
40%
Based on JPM's LTCMAs, we think a person could allocate 100% to cash and still spend this % of their wealth for 30 years without running out of money
3%
This country is the only negative yielding debt remaining in the world
Japan
Today, sales for weight loss drugs is ~$6 billion. We believe sales could reach this dollar amount by 2030.
$100 billion
According to our Outlook, we highlight these two segments of Credit as opportunities.
Real Estate and Private Credit
This component of CPI gives us the most confidence that inflation will continue to fall
Shelter
These two factors are why we think cash may underperform
Falling Rates and Improving Earnings
Maturity range offering attractive yield, but less exposed to longer-term risks associated with government deficits
3-10 year
Real private spending on manufacturing structures has doubled since 2021, largely driven by these factories
Semiconductors
Current yield (round number) of direct loans by private lenders
12%