This month, Jason Weaver discusses labor, leverage and liquidity.
LEVERAGE
Ratio of total required household debt payments to total disposable income
The Fed pays attention to this metric as it is a good gauge of the health of the consumer
A high level of indebtedness can lead to increased delinquencies and bankruptcies. This could threaten the health of the economy.
LIQUIDITY
In Q3 2023, total money market fund balances reached an all time high of $6.1 Trillion.
The high money market balances can be attributed to higher yields and economic uncertainty
As yields fall, investors become more comfortable with the economy and yields fall, investors will likely begin investing more of their cash
