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The build-out of AI infrastructure is fueling a significant boom in debt issuance, estimated at $400 billion. This capital is funding data centers and related technology, creating new opportunities in both public investment-grade debt and private credit markets.
The U.S. is actively pursuing a strategy to establish a rare earth elements supply chain independent of China. This involves domestic mining projects, international acquisitions in allied nations like Brazil, and direct U.S. government investment to mitigate national security risks.
Despite strong Q1 GDP growth and robust business investment, the Federal Reserve remains concerned about inflation, as indicated by dissents at the recent FOMC meeting. This creates a central tension between a resilient economy and the potential for a hawkish monetary policy response.
The housing market suffers from a decade of underbuilding relative to household formation, creating a fundamental supply shortage. This is compounded by the "rate lock-in" effect, where homeowners with low mortgage rates are unwilling to sell, further constraining inventory and challenging affordability for new buyers.
While not viewed as a systemic risk by Goldman Sachs due to its structure, the private credit market is under scrutiny. The market is characterized by locked-in institutional capital, which provides stability and significant "dry powder" to deploy into any market dislocations.