Torsten Slok

So that means that the total supply of investment-grade bonds that are coming to the market is about 12 trillion from the government and 2 trillion from corporates.

That brings you to a number that is roughly, given US GDP is 30 trillion, roughly 50% of GDP that needs to be absorbed

by financial markets.

That's a very, very, the highest number we've seen in history.

That's a very substantial amount of bonds of investment-grade credit and investment-grade bonds that are coming to the market.

So the short answer is, if we already worry about inflation going up because of Mike's chart with inflation expectations going up, we have tariffs putting up with pressure, all the prices putting up with pressure, we have a fairly strong economy also putting up with pressure, and now we also have significant supply coming to the market, that does bring the risk that there is some upside pressure on rates, both in the front and the long end.

And there's also on top of that, because of the significant increase in IG debt, also upward pressure on credit spreads.

That means that both spreads in credit are under upward pressure for these technical reasons, and also the level of yields in rates is also under upward pressure because of the supply being so significant.

Well, that's why a lot of the people who spoke just before we started here discussing are exactly saying that this is actually an interesting time to look at the level of yields, especially if there is now an environment where all the prices might eventually come down, and especially if people begin to worry about that the economy might also begin to slow a bit down.

If that's the case, you both have a level of base rates that's higher temporarily at the moment,

but you also have spreads in credit that's also temporarily higher, and that does give an all-in yield in credit, both in investment grade, but also some parts of high yield that actually looks quite juicy.

Software has its own problems, but the rest of the high yield market is actually generally also looking at yield levels that are at more interesting levels at the moment.

Listen to me.

Markets are bigger than us.

What you have here is a structural change in the world distribution.

I don't think you're a non-expert on book writing at this point.

How many books have you written now?

Wow.

All right.

I guess in the past two months, I have not been reading enough.