The longest bull market in history has created a side effect. The underlying exposure of American households to equities has quietly surged to unprecedented levels, creating a structural fragility that markets seem to overlook.
St. Louis Fed data shows that combined household and nonprofit equity holdings exceed 47%. The Kobeissi Letter narrows the household number at 25.63% – the highest reading since the data collection began in the 1940s.
That figure eclipses the 19.56% peak reached during the Dot-Com bubble and surpasses the elevated levels seen in 1968. Household balance sheets are now more tethered to equity performance than at any point in modern financial history.
Policy Uncertainty
The timing of this concentration is problematic. With the Federal Reserve locked into a 3.5–3.75% policy position, its room for maneuver is restricted.
The uncertainty around succession only compounds the issue. Fed Chair Jerome Powell’s term ends on May 15, yet his potential successor, Kevin Warsh, has not yet been confirmed by the Senate. Per Reuters’ report, the U.S. Senate Banking Committee has delayed the confirmation hearing, narrowing the transition window.
At …
This post was originally published here
