It’s The Liquidity!

I have a love-hate relationship with liquidity-based explanations for risk-asset behavior. It's self-evidently the case that central bank liquidity provision post-GFC contributed mightily to risk-asset performance. And it's not a coincidence that the world tends to be a friendlier place when the dollar's on the back foot (dollar weakness is liquidity-positive globally). That said, it (too) often feels as though market participants and strategists lean lazily into the top-down liquidity narrati