Bob FraserCFO & Macro Strategist | Data-Driven Investing Expert | Speaker & Author

"There's 5 trillion in excess cash sitting in banks." Bob Fraser

Name: "There's 5 trillion in excess cash sitting in banks." Bob Fraser
Uploaded: 2023-02-12T15:00:05+00:00
Duration: 37 s
Channel: Bob Fraser
Description: In this brief commentary, Bob Fraser highlights that banks are holding an unprecedented $5 trillion in excess cash, a level never seen before and far…

12 Feb 2023 · 1 min

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In this brief commentary, Bob Fraser highlights that banks are holding an unprecedented $5 trillion in excess cash, a level never seen before and far above the previous $1 trillion peak. He attributes the surge to a COVID‑era “hockey‑stick” spike. Fraser points to several macroeconomic indicators that suggest the consumer sector remains extremely healthy: retail sales are running about 30 % above trend, unemployment numbers are unexpectedly low and expected to stay low, and the debt‑service‑coverage ratio remains low even as interest rates rise. Together, these data points lead him to conclude that the economy’s consumer side is robust and likely to continue performing well.

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There's $5 trillion in excess cash sitting in banks. We've never seen anything like this. It's never been higher than $1 trillion. And all of a sudden it spiked up during COVID Literally a hockey stick chart. When you show the chart, unbelievable chart. It's crazy. Just cash. You look at consumers, retail sales up 30% over trend. That's an enormous number. You look at the unemployment numbers that just came out, shocked everybody. Not me. We're going to continue to see lower unemployment numbers. The consumer is extremely healthy. You look at debt service coverage ratio, the amount of money that's being spent to cover debt service, even with higher interest rates, it's still low.