Traderfirstyear-(9 of ?) Investment Note Dissecting Nominal & Real GDP The Federal Reserve Balance Sheet Expansion is growing at a pace 5x's faster than the economic growth rate of the US Economy. This liquidity will continue to leak into US Equity Markets, Tightening credit spreads, and in the long run reducing overall realized volatility. The more negative convexity they add to their balance sheet, the less private delta hedging is needed for some of the more complex hedgings of risk assets. If you look through what Wall-Street is posting on Nominal Growth pre-Covid vs Post COVID. There is such a big difference between their Equity Departments overall analysis and their Economic Departments The equity markets were overvalued during Pre-COVID if you incorporate 2022 to 2023 Wall-Street estimates on Nominal US Growth. The weaponization of the Federal Reserve Balance Sheet along with Share Repurchase is the single largest reason equities continue to move higher. $SPY $DIA $QQQ
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