Excess Returns · Saturday, August 29, 2026
Kevin Muir highlights the current global fiscal environment, noting that unlike in the past when the US had a higher deficit-to-GDP ratio than other developed nations, now many countries are increasing fiscal stimulus. This shift, partly attributed to geopolitical positioning, contributes to the overall supply in bond markets.
“And then to top it all off, we have Trump's geopolitical positioning has caused the rest of the world to realize that everyone needs to do, you know, put their pedal to the metal in terms of fiscal, you know, stimulus and actually spend as well.”
“So in the past, we, you know, three years ago or two years ago, the US had a 7% deficit to GDP, the rest of the world was running two, two and a half in terms of the developed world, like here, I'm Canadian, we were running two, two and a half, Japan was two and a half, Europe was two and three quarters or something.”
“All of that has now been thrown out the window as we all scramble as the world order is being, you know, redrawn.”