Raoul Pal: Likelihood of investment market supercycle is growing

The possibility of a supercycle emerging across the investment market has increased, according to an analysis by Real Vision CEO Raoul Pal. He identified several key factors supporting this outlook, including the continuously rising interest costs the U.S. must pay, a larger proportion of short-term government bonds, and the potential for banks to expand liquidity to finance capital expenditures. However, Pal noted that inflation remains a variable. He explained that for a supercycle to materialize, a slowdown in service inflation driven by productivity gains must be sufficient to offset rising goods inflation. While this dynamic worked in the 1990s, it remains to be seen if it will repeat, Pal said. He concluded that while the forecast is not yet certain, its probability is steadily increasing.