From Investing.com: 2025-02-07 15:39:00

Market liquidity is crucial to the economy, inflation, and money management. Pento Portfolio Strategies’ IDEC model is driven by liquidity, impacting stocks, bonds, currencies, and commodities. Factors affecting liquidity include bank lending practices, interest rates, debt, and the Fed’s balance sheet. The financial system relies on liquidity for proper money market function. Inflation is caused by a loss of confidence in fiat currency due to government actions. QE and low interest rates lead to asset price inflation. Rising interest rates are a major concern for markets in 2025 due to record debt levels. Central banks risk losing control of the yield curve as inflation and insolvency fears rise. Bond and stock prices in a bubble pose risks to traditional portfolios.



Read more at Investing.com: Rising Yields and Reckless Spending: America’s Inflation and Debt Crisis