Market commentator, The Kobeissi Letter, said U.S. households are holding a record cash buffer despite record equity exposure, citing Bank of America Research data showing household cash, stock, and bond holdings remain well above their long-term trends.
Cash Buffer
In a post on X on Sunday, The Kobeissi Letter cited a Bank of America Research Investment Committee exhibit, “Exhibit 7: Cash levels 1/3 higher than 2010s trend,” based on Haver Analytics and Federal Reserve Flow of Funds data. The exhibit compares U.S. household financial assets with their linear trend from 2009 through 2019.
According to the exhibit, household equity holdings have climbed to roughly $72 trillion, about $18 trillion, or 33%, above their long-term trend. The post also noted that household stock ownership has more than doubled since 2020.
Meanwhile, cash and cash equivalent holdings have risen to about $20 trillion, an all-time high. That is roughly $5 trillion, or 33%, above the long-term trend shown in the exhibit.
