Business & Finance
Leverage That Fueled US Stock Rally Becomes a Growing Concern
Key Points
Leverage That Fueled US Stock Rally Becomes a Growing Concern The leverage that helped fuel the US stock rally is now becoming an increasing source of unease. The surge in market leverage, stemming in part from the massive growth of levered exchange-traded products, retail margin accounts and hedge fund deposits at prime brokers, is stoking worries that it may exacerbate the next crisis. The demand to borrow money has driven an unusual mid-year spike in financing costs, which have reached...
Leverage That Fueled US Stock Rally Becomes a Growing Concern
The leverage that helped fuel the US stock rally is now becoming an increasing source of unease.
The surge in market leverage, stemming in part from the massive growth of levered exchange-traded products, retail margin accounts and hedge fund deposits at prime brokers, is stoking worries that it may exacerbate the next crisis. The demand to borrow money has driven an unusual mid-year spike in financing costs, which have reached the highest levels since December 2024.