Second Quarter 2017 Market Perspective

Interest rates have been a primary tool of global central bankers in their effort to lift asset prices. Globally, interest rates bottomed over the last 12-24 months. Any continued rise will certainly get the attention of markets and policy makers.

Governments (and for that matter, corporations) can little afford higher interest rates. US federal debt levels have exploded in recent decades. 

In addition, there are more “debt-like” liabilities cropping up, including unfunded pension liabilities. Unfunded public liabilities act like debt, because the funding for public pensions comes from the same tax revenue base that pays interest on debt. The state and federal governments have underfunded liabilities equivalent to 40% of GDP, on more than $7 trillion… READ MORE