DID YOU KNOW - EVERYTHING RALLY

The ‘everything rally’ is a phrase that describes the rapid price gains in the past decade of most financial and nonfinancial assets, including shares, bonds, precious metals, industrial and soft commodities, cryptocurrencies, property and even art. The term first started appearing in financial literature some years after the 2008/2009 Global Financial Crisis (GFC).

The genesis of the broad-based price rallies was the massive monetary and fiscal stimulus injected into financial systems by leading central banks and governments in the wake of the GFC to avert an economic depression. These measures included cutting short-term interest rates to zero and below.

Low interest rates increase the attractiveness of all other assets relative to cash, pushing up their prices. But extreme volumes of central bank liquidity, FOMO (fear of missing out) and TINA (there is no alternative) are also blamed for the rally.

Latterly, the ‘everything rally’ was renewed after unprecedentedly large monetary and fiscal interventions following the COVID-19 recessions of 2020.