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As deals from venture capital, private equity and real estate firms produce more headlines about billion-dollar deals and millionaire backers, investors are clamoring for ways to sink their teeth into so-called alternative investments.
Driving the news: Indexing giant Vanguard Group has reportedly started discussions with private-equity firms about a push further into alternative investments.
What we're hearing: There's been growing interest in the space from clients at multinational investment firm UBS. Suni Harford, UBS Asset Management head of investments, says "not a day goes by" that she doesn't get questions from clients about alternatives.
What's happening: Many believe private equity has significantly outperformed stocks over the past decade, even though the data is more ambiguous. But as more companies like Uber, Slack and Pinterest come to market already worth billions, demand is growing to get in on the early stages of investment.
Harford says demand for alternatives also is rooted in increased comfort with private markets despite the lack of regulations and safeguards afforded by public markets.
Further, says UBS head of real estate and private markets Joseph Azelby, alternatives are attracting flows from investors of all stripes — from high net worth individuals to institutional money managers who are pulling capital out of bonds, because of their historically low yields, and out of stocks, because of their successful run.
"The flow into alternatives is not actually showing up in hedge funds," said Barry Gill, head of active equities at UBS, who previously worked on the firm's multi-strategy hedge fund.
Go deeper: The hedge fund moment is over
The Fed delivered its first conflicted policy decision under Chair Jerome Powell last week, when St. Louis Fed president James Bullard opposed the decision to keep rates at their current 2.25%–2.50% level.
What they're saying:
Bullard: "[B]oth the core and headline personal consumption expenditures (PCE) inflation measures have declined substantially since the end of last year and are presently running some 40 to 50 basis points below the FOMC's 2% inflation target."
Kashkari: "The Committee has consistently been too optimistic in forecasting inflation returning to 2 percent. ...[W]e have said that 2 percent is a target, not a ceiling, so if we are under or over 2 percent, it should be of equal concern."
Bullard and Kashkari both talked about the negative impact tariffs and the U.S.-China trade war could have on the economy, but neither mentioned the impact of tariffs on inflation.
What they're not saying: Tariffs are a tax on imported goods paid by U.S. businesses that new research from the New York Fed suggests would increase taxpayers' overall costs by $106 billion a year.
Credit card delinquency rates in Q1 hit the highest level since 2012, with total household debt rising to nearly $14 trillion. Torsten Slok, chief economist at Deutsche Bank Securities, warns that creeping delinquency rates, and the "associated increase in interest rates on credit cards and auto loans will begin to weigh on consumer spending."
Russia's booming stock market and currency, China's second quarter bounce and Nicolás Maduro's ability to hold power in Venezuela this year have all flown directly in the face of conventional wisdom about the power of the U.S. to cajole bad actors on the international stage through sanctions.
Why it matters: As the Trump administration mulls further punitive actions on China, Iran and a growing list of countries, there's growing evidence the U.S. is losing its coercive power.
That's been particularly notable in the case of Russia, which has been delivering solid returns to investors, despite facing U.S. sanctions for years.
"They're supporting their economy by adjusting who they're trading with and the markets that they're going into," Chris Gaffney, president of world markets at TIAA Bank, tells Axios. "We're seeing some of that with China too, where China is establishing more trade with Europe because of the ongoing trade spat with the U.S."
What to watch: The common thread is China, which has become the top trading partner with many of the world's countries and essentially ignores U.S. sanctions. Russia is in talks with Iran and has deepened its trading relationship with China while it profits from cheap Venezuelan oil imports the rest of the world is barred from receiving.