Apollo’s Slok Sees More Economic Hardship as US Defaults Rise

Torsten Slok, chief economist at Apollo Global Management, has a clear message for investors: interest rate-hikes are working and policymakers want you to shelter in risk-free assets.

Evidence of an economic slowdown is piling up, and that’s exactly what central bankers in the US and Europe want, he says, pointing to rising delinquency rates on credit card loans, junk-bond defaults, a rapid slowdown in banking lending and softer labor markets.

It marks a regime shift from the era of easy money, when the Federal Reserve was effectively telling investors to bypass Treasuries for stocks and low-rated credit. Now, ...