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Style Chart Pack: Excess Liquidity Is Driving Markets Higher

by Irene Tunkel, Chief Strategist   Guy Russell, Associate Vice President  

Generative AI-related rally resumed in May. Much of the recent market gains are down to excess liquidity that was begotten by the massive pandemic stimulus, creating a dichotomy between multiple economic challenges and exuberant markets. The Fed is unlikely to step in to prevent the bubble as it is currently more worried about the near-term downside for growth than financial stability.

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