The Flow Show-One Big Beautiful Bubble

Trading ideas and investment strategies discussed herein may give rise to significant risk and are not suitable for all investors. Investors should have experience in relevant markets and the financial resources to absorb any losses arising from applying these ideas or strategies. >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analystunder the FINRA rules.Refer to "Other Important Disclosures" for information on certain BofA Securities entities that takeresponsibility for the information herein in particular jurisdictions.BofA Securities does and seeks to do business with issuers covered in its researchreports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 9 to 11. 12847681 The Flow ShowOne Big Beautiful Bubble Scores on the Doors: gold 26.6%, stocks 11.4%, IG bonds 7.6%, HY bonds 7.1%, govt bonds 7.0%, commods 2.7%, cash 2.2%, oil -6.6%, US dollar -10.4%, crypto -10.6% YTD. Zeitgeist: “Can’t cut spending, can’t cut defense, can’t cut debt, go big with tariffs, so only way they can pay for One Big Beautiful Bill is with One Big Beautiful Bubble.” The Biggest Picture: Big Beautiful Bill set to raise US debt ceiling $5tn to $41tn (Chart 2); US debt set to rise to ~$43tn by next US election in ’28, to exceed ~$50tn by ’32. Tale of the Tape: political U-turns on German fiscal, UK benefit spending, US DOGE, electorates/politicians not voting for lower debt/deficits (govt spend % GDP = 44% UK, 41% US – Chart 5); why asset allocators so averse to long bonds, cutting US dollar exposure, raising allocation to international markets, hard assets, digital assets in ‘25. The Price is Right: worst first half for US dollar (-11% – Chart 3) since ‘73, best for gold (26%) since ‘79, best for ACWI ex-US stocks (16%) since ‘93; long “long bond” whiffed (TLT 2.9%), but S&P 500 reversed $10tn market cap loss with $11tn gain (Mag7 up $5tn – Chart 4), and 7k vs 5k “bubble or bust” summer risk firmly skewed to former. Chart 2: Stick a pork in it! US public debt outstanding & CBO projections ($tn) Source: BofA Global Investment Strategy, Bloomberg BofA GLOBAL RESEARCH More on page 2… $36tn = Jan'25 debt ceiling$41tn = new Senate BBB debt ceiling$43tn = Nov'28 election CBO debt projection2032*$51tn010203040501901191619311946196119761991200620212036US public debt outstanding ($tn)CBO projections03 July 2025 Investment Strategy Global Michael Hartnett Investment Strategist BofAS +1 646 855 1508 michael.hartnett@bofa.com Elyas Galou >> Investment Strategist BofASE (France) +33 1 8770 0087 elyas.galou@bofa.com Anya Shelekhin Investment Strategist BofAS +1 646 855 3753 anya.shelekhin@bofa.com Myung-Jee Jung Investment Strategist BofAS +1 646 855 0389 myung-jee.jung@bofa.com Chart 1: BofA Bull & Bear Indicator R