iCapital Market Pulse: Peak Liquidity?

Key takeaways: Global liquidity conditions appear exceptionally supportive, with fiscal transfers, easier real monetary policy, expanding bank credit, and abundant private-market dry powder reinforcing one another. With liquidity abundant even as Treasury yields approach two-decade highs, markets may be more vulnerable to a rate shock than the headline conditions imply. The liquidity story could reverse if tariffs and oil revive inflation, fiscal policy turns restrictive, or slowing profit growth weakens investor demand for stocks and corporate bonds.