Why $2.9 Trillion Will Make This 6.9% Yielding Fund Explode

Why $2.9 Trillion Will Make This 6.9% Yielding Fund Explode

In the hands appears with a dollar sign concept design. The chicken littles fretting about inflation are ignoring something: the "bonus" $2. 9 trillion that's primed to ignite stocks“”one group of stocks in particular. The $2. 9 trillion isn't a new stimulus plan (although those seem to roll out daily). It's the extra savings hoarded by consumers around the world. To put that in context, global GDP is about $89 trillion, so the total saved will amount to 3. 3% of extra growth when it's finally unleashed. Global savings during lockdown You'd think most economists would have already accounted for this savings glut in their projections. You'd also expect markets to price in this information. But neither is the case. This lackluster performance is because inflation worries are dragging on stocks, with the yield on the 10-year Treasury note having nearly doubled from record lows last year. But when you factor in the pent-up demand that's about to be unleashed, and the fact that inflation is good for stocks, since higher prices mean higher revenue and earnings in nominal-dollar terms, you get an obvious buying opportunity. We can take advantage of this strange market moment by buying the dip, and