Despite my handle I'd wager that it all comes down to a very risk averse society as shown by pretty much every metric ranging from low birth rate to drinking to smoking to drug usage etc.
Back in the days when interest rates went down, people started new businesses or expanded those they already owned at a huge pace. I mean the population as a whole not the businesses in the S&P500.
When the Fed rolled rates to zero and did QE post 2008 and super QE in 2020-2021 the population just invested in the stock and housing market. No initiative just buying "proven assets" .
Investing in the stock market with a financial advisor essentially buying the S&P or some other mutual fund..that's way less risky than starting your own business.
Now the Fed is raising rates and people (and financial advisors) aren't even sure about stocks anymore, they are selling in droves and go straight to US bonds which are even more risk averse (it's essentially the stuff that Insurance companies are required to hold by law to secure their premiums because the risk of default of US Federal govt is essentially zero)
Of course there is crypto that is a casino, still it could be argued that investing in an asset with a marketcap of 1T dollar however new and unproven is still more risk averse than starting your own business.
> Back in the days when interest rates went down, people started new businesses or expanded those they already owned at a huge pace. I mean the population as a whole not the businesses in the S&P500.
Did you miss the startup boom + bubble of the past decade or something
> Investing in the stock market with a financial advisor essentially buying the S&P or some other mutual fund..that's way less risky than starting your own business.
Increases in the cost of healthcare, housing, education, etc. probably has something to do with the growing precariousness of the population and less willingness to engage in risky ventures like starting businesses. Can't blame people for wanting to mitigating risk when the stakes are so high these days.
Back in the days when interest rates went down, people started new businesses or expanded those they already owned at a huge pace. I mean the population as a whole not the businesses in the S&P500.
When the Fed rolled rates to zero and did QE post 2008 and super QE in 2020-2021 the population just invested in the stock and housing market. No initiative just buying "proven assets" .
Investing in the stock market with a financial advisor essentially buying the S&P or some other mutual fund..that's way less risky than starting your own business.
Now the Fed is raising rates and people (and financial advisors) aren't even sure about stocks anymore, they are selling in droves and go straight to US bonds which are even more risk averse (it's essentially the stuff that Insurance companies are required to hold by law to secure their premiums because the risk of default of US Federal govt is essentially zero)
Of course there is crypto that is a casino, still it could be argued that investing in an asset with a marketcap of 1T dollar however new and unproven is still more risk averse than starting your own business.