U.S. Bank Reserves as a Percent of GDP As bank reserves relative to GDP gradually return to normal levels, they will no longer contribute to the upward momentum of equity valuation multiples. Image: Morgan Stanley Wealth Management
S&P 500 and Bank Reserves U.S. excess liquidity is expected to rise significantly and tends to push equities higher. Image: Nordea and Macrobond
Bank Reserves and S&P 500 J.P. Morgan suggests that Fed-injected liquidity is not the reason for the rise in the valuation of risk assets. Image: J.P. Morgan
Central Bank Reserve Holdings of Gold For the first time since the end of WWII, central banks are increasing their holdings of gold to diversify their reserves away from the U.S. dollar, amid trade tensions. Image: Bernstein
Bank Reserves and the U.S. Dollar This interesting chart shows the correlation between excess reserves held by banks at the Fed and the U.S. dollar. Image: Financial Times
Annual Changes in Central Bank Gold Reserves The significant increase in gold reserves by China, Poland, and Singapore in 2023 reflects a broader trend of central banks expanding their holdings of bullion amid escalating geopolitical and economic risks. Image: BofA Global Research
S&P 500 and Last Hike in Federal Reserve Bank Rate Hiking Cycles The last Fed rate hike is not necessarily bearish for U.S. stocks over the next 12 months. Image: Carson Investment Research
Interest Rates – S&P 500 Index and Federal Reserve Bank Rate Hikes per Year Historically, if the U.S. economy isn’t in a recession, the S&P 500 tends to do well during Fed rate hikes. Image: LPL Research
Federal Reserve Bank of New York Weekly Ecocomic Index and U.S. 10-Year Treasury Yield While the U.S. 10-year Treasury yield tends to follow the direction of macroeconomic indicators, it has decoupled from fundamentals. Image: Morgan Stanley Wealth Management
U.S. Money Supply M2 and Reserves of the Banking System U.S. money supply M2 shows significant jumps in growth, which could affect future inflation. Image: Financial Times
Reserve Bank Credit, Treasury Securities and MBS This chart shows how Reserve Bank credit has increased, as the Fed has continued to add treasury securities to its balance sheet. Image: Wells Fargo Investment Institute