Rick Rule: Private capital seeks higher returns due to deficit spending and quantitative easing - Traders Union
Rick Rule: Private capital seeks higher returns due to deficit spending and quantitative easing - Traders Union
Source: Traders Union
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DW NOTE
Rick Rule is correct that deficit spending and QE push capital into riskier assets — the mechanism is textbook. But the timing matters. The Fed held at 3.5%-3.75% last meeting and markets now price 60% odds of a September hike. QE ended long ago; the current regime is quantitative tightening and rising real rates. Private capital isn't chasing yield because money is loose — it's chasing yield because public markets offer neither growth nor safety at these multiples.