The average market risk premium in the United States decreased slightly to *** percent in 2023. This suggests that investors demand a slightly lower return for investments in that country, in exchange for the risk they are exposed to. This premium has hovered between *** and *** percent since 2011. What causes country-specific risk? Risk to investments come from two main sources. First, inflation causes an asset’s price to decrease in real terms. A 100 U.S. dollar investment with three percent inflation is only worth ** U.S. dollars after one year. Investors are also interested in risks of project failure or non-performing loans. The unique U.S. context Analysts have historically considered the United States Treasury to be risk-free. This view has been shifting, but many advisors continue to use treasury yield rates as a risk-free rate. Given the fact that U.S. government securities are available at a variety of terms, this gives investment managers a range of tools for predicting future market developments.

Graph and download economic data for Real Risk Premium (TENEXPCHAREARISPRE) from Jan 1982 to Jul 2025 about premium, real, and USA.

This statistic illustrates the median market risk premium used for selected countries worldwide in 2024. The median market risk premium used in Turkey was the highest and reached a value of **** percent in that year.

Market risk premiums (MRP) measure the expected return on investment an investor looks to make. For potential investors looking to add to their portfolio, the perfect scenario for a risk-based investment would be a high rate of return with as small a risk as possible. There are three main concepts to MRP’s, including required market risk premiums, historical market risk premiums and expected market risk premiums. United Kingdom shows little return for risk Europe wide, Finland had one of the lowest MRP alongside Poland and Germany. Ukraine had average risk premiums of **** percent in 2024. Having a lower market risk premium may seem bad, but for countries such as the UK and Germany where rates have been consistent for several years, it is because the market is stable as an environment for investment. Risk free rates Risk free rates are closely associated to market risk premiums and measure the rate of return on an investment with no risk. As there is no risk associated, the rate of return is lower than that of an MRP. Average risk free rates across Europe are relatively low.

The average market risk premium in Canada was *** percent in 2024. This means investors demanded an extra *** Canadian dollars on a 100 Canadian dollar investment. This extra cost should compensate for the risk of an investment based in Canada. What causes risk? As far as country-specific factors are concerned, macroeconomic trends can cause risk. For example, the inflation rate in relation to other countries can change the relative value of an investment. Lower inflation in Canada could weaken the Canadian dollar, reducing the value of Canadian assets in terms of another currency, such as the euro or U.S. dollar. The Canadian context As a country, Canada has a fairly high national debt. Some economists point to this as an increased default risk, since debt servicing can become costly. However, most investors agree that Canada, as an advanced economy, is creditworthy and not at risk of defaulting. A better measure is to look at Canada’s risk premium in the context of interest rates from other countries. These deposit rates can be used as a baseline for the market risk premium of other countries, though they do not include all the factors that have been used to calculate this statistic.

United States US: Risk Premium on Lending: Lending Rate Minus Treasury Bill Rate data was reported at 3.186 % pa in 2016. This records a decrease from the previous number of 3.201 % pa for 2015. United States US: Risk Premium on Lending: Lending Rate Minus Treasury Bill Rate data is updated yearly, averaging 2.868 % pa from Dec 1960 (Median) to 2016, with 57 observations. The data reached an all-time high of 4.793 % pa in 1981 and a record low of 0.587 % pa in 1965. United States US: Risk Premium on Lending: Lending Rate Minus Treasury Bill Rate data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s United States – Table US.World Bank.WDI: Interest Rates. Risk premium on lending is the interest rate charged by banks on loans to private sector customers minus the 'risk free' treasury bill interest rate at which short-term government securities are issued or traded in the market. In some countries this spread may be negative, indicating that the market considers its best corporate clients to be lower risk than the government. The terms and conditions attached to lending rates differ by country, however, limiting their comparability.; ; International Monetary Fund, International Financial Statistics database.; ;

The average market risk premium in South Africa increased to *** percent in 2024. Market premium risk represents the difference between return on equities and a risk-free investment, which is normally associated with short-term government bonds. For comparison, the U.S. market premium risk amounted to *** percent in the same year. Risk-free rate Most analysts consider the U.S. treasury rate to be the risk-free rate for the term of their investment, assuming the United States government will not default. Just as consumers in the Unites States get a credit rating, agencies such as Standard & Poor’s rate countries’ credit risks. Using these data, analysts compute the country-specific default risk, which in turn has an influence on the value of risk-free rate. What influences the return on equities? The economic factors such as political stability in a country, inflation rate, level of indebtment, trade deficit and investments have an influence on the activities of companies and their valuation on the stock exchanges. Apart from the economic cycle, the company’s operations itself, which are reflected in the results published in the financial reports, can boost or diminish the stock returns.

Abstract (en): This paper develops a production-based asset pricing model with two types of agents and concentrated ownership of physical capital. A temporary but persistent "distribution shock" causes the income share of capital owners to fluctuate in a procyclical manner, consistent with US data. The concentrated ownership model significantly magnifies the equity risk premium relative to a representative-agent model because the capital owners' consumption is more-strongly linked to volatile dividends from equity. With a steady-state risk aversion coefficient around 4, the model delivers an unleveled equity premium of 3.9 percent relative to short-term bonds and a premium of 1.2 percent relative to long-term bonds. (JEL D31, E13, E25, E32, E44, G12)

The excess bond premium (EBP) is a measure of investor sentiment or risk appetite in the corporate bond market. A credit spread index can be decomposed into two components: a component that captures the systematic movements in default risk of individual firms and a residual component: the excess bond premium that represents variation in the average price of bearing exposure to US corporate credit risk, above and beyond the compensation for expected defaults. The EBP component of corporate bond credit spreads that is not directly attributable to expected default risk provides an effective measure of investor sentiment or risk appetite in the corporate bond market.

This paper gauges the relative contribution of risk aversion, inter-temporal substitution and taste shocks on postwar monthly US equity premia. The time-varying consumption, market, and taste risks involved in the Euler equations are recovered from a common factor GARCH process and the MLE are obtained by applying the Kalman filter. Empirically, (1) the market risk is the only source of risk that does not statistically affect the equity premia, and thus, the hypothesis that the coefficient of relative risk aversion corresponds to the reciprocal of the elasticity of inter-temporal substitution is not rejected; (2) the estimates are reasonable, so that the equity premium puzzle is circumvented; and (3) taste risks are quantitatively important in capturing excess returns movements.

Graph and download economic data for Term Premium on a 10 Year Zero Coupon Bond (THREEFYTP10) from 1990-01-02 to 2025-07-18 about term premium, 10-year, bonds, and USA.

US Tariff Impact on Market

US tariffs on reinsurance-related services, particularly those affecting global reinsurers, could increase operational costs for companies relying on international markets for risk mitigation. Tariffs could raise the cost of certain reinsurance services and contracts by 5-10%, particularly for those involving cross-border transactions.

The cost of services for property and casualty reinsurance may increase as reinsurers face higher premiums for cross-border agreements. This could lead to higher costs for insurance providers and, in turn, increase premiums for end consumers. Additionally, higher tariffs may disrupt the flow of capital and data between reinsurers and brokers, further complicating the market landscape.

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• Economic Impact: Tariffs may increase costs for reinsurers, leading to higher premiums for insurance policies, which could reduce demand in price-sensitive markets.
• Geographical Impact: North America, particularly the US, could face slower market growth as tariffs on reinsurance services raise costs for businesses and insurance providers, reducing competitiveness.
• Business Impact: Reinsurers may need to adjust pricing models, absorb the increased costs, or explore new markets to maintain profitability, which could disrupt the global reinsurance supply chain.

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Premium Cosmetics Market Size 2024-2028

The premium cosmetics market size is forecast to increase by USD 67 billion at a CAGR of 9.75% between 2023 and 2028.

The market is experiencing significant growth, driven primarily by the increasing demand for high-end skincare products. Consumers are becoming more conscious of their health and appearance, leading them to invest in premium cosmetics that offer superior quality and effectiveness. This trend is particularly prominent in developed regions, where consumers have higher disposable income and a greater appreciation for luxury brands. However, there are challenges that market players must navigate to capitalize on this growth. One such challenge is the lack of consumer reach and premium brand penetration in major parts of developing regions. Multichannel marketing strategies, including e-commerce and social media, offer a potential solution to this issue. By expanding their distribution channels and leveraging digital marketing tools, cosmetics companies can reach a wider audience and build brand awareness in these markets. Additionally, partnerships with local distributors and strategic collaborations with influencers can help premium brands establish a foothold in developing regions. Overall, the market presents significant opportunities for growth, particularly for companies that can effectively navigate the challenges of consumer reach and brand penetration in developing regions.

What will be the Size of the Premium Cosmetics Market during the forecast period?

Request Free SampleThe market is experiencing dynamic shifts as consumers prioritize personalized beauty solutions and ethical practices. Indie beauty brands and niche players are gaining traction, offering unique offerings and luxury customer service. Advanced formulas, such as hair repair and skincare technology, are driving innovation, while active ingredients and botanical extracts are at the forefront of data-driven beauty trends. Beauty influencer marketing and content marketing are essential channels for reaching consumers, with luxury beauty events and exclusive services further enhancing the experience. Sustainable packaging and eco-friendly practices are becoming increasingly important, as is the focus on skin hydration and barrier repair. Premium ingredients, including matte finish, signature scents, and high-pigment formulas, continue to be in demand. Beauty subscription services and online communities cater to consumers' evolving preferences, with beauty tourism and luxury retail experiences offering immersive, personalized journeys. Hair care products, color cosmetics, and skincare technology are key areas of investment, as brands strive to deliver advanced formulas and luxury fragrances. Hair growth, skin brightening, and social media marketing are also significant trends shaping the market.

How is this Premium Cosmetics Industry segmented?

The premium cosmetics industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2024-2028, as well as historical data from 2018-2022 for the following segments. ProductSkincare productsFragrancesColor cosmeticsHair care productsOthersDistribution ChannelOfflineOnlineGeographyNorth AmericaUSEuropeGermanyUKMiddle East and AfricaAPACChinaJapanSouth AmericaRest of World (ROW)

By Product Insights

The skincare products segment is estimated to witness significant growth during the forecast period.The premium skincare market is experiencing growth as an increasing number of individuals, both men and women, prioritize better skincare solutions. This segment's expansion is driven by the desire for personalized, scientifically formulated products that cater to individual skin needs. The integration of technology, such as artificial intelligence and virtual try-on, enables personalized recommendations, enhancing the customer experience. Moreover, ethical sourcing, sustainability, and environmental responsibility are becoming essential factors in consumer purchasing decisions. Brands that emphasize cruelty-free cosmetics, vegan options, and eco-friendly packaging are gaining popularity among Gen Z consumers and millennials. The luxury experience is also a significant influencer, with exclusive brands offering personalized consultations and concierge services to cater to their high-value clientele. The global skincare market's expansion is not limited to established markets. Emerging markets, particularly in Asia, are witnessing a surge in demand for premium skincare products. Luxury retailers are capitalizing on this trend by offering exclusive services and collaborating with influencers to reach a broader audience. The clean beauty movement is another trend shaping the market, with consumers seeking products free from harsh chemicals and synthetic ingredients. This shift is leading to the develo

A little over half of investors believe the risk premium of seniors housing in the United States will increase in the next 12 months, according to a June 2022 survey. In this case, the risk premium refers to the spread between the risk-free 10-Year Treasury and seniors housing cap rates. The average United States risk market premium has hovered between 5.3 and 5.7 percent since 2011.

This paper aims to evaluate the effects of the aggregate market volatility components - average volatility and average correlation - on the pricing of portfolios sorted by idiosyncratic volatility, using Brazilian data. The study investigates whether portfolios with high and low idiosyncratic volatility - in relation to the Fama and French model (1996) - have different exposures to innovations in average market volatility, and consequently, different expectations for return. The results are in line with those found for US data, although they portray the Brazilian reality. Decomposition of volatility allows the average volatility component, without the disturbance generated by the average correlation component, to better price the effects of a worsening or an improvement in the investment environment. This result is also identical to that found for US data. Average variance should thus command a risk premium. For US data, this premium is negative. According to Chen and Petkova (2012), the main reason for this negative sign is the high level of investment in research and development recorded by companies with high idiosyncratic volatility. As in Brazil this type of investment is significantly lower than in the US, it was expected that a result with the opposite sign would be found, which is in fact what occurred.

We use a macro-finance model, incorporating macroeconomic and financial factors, to study the term premium in the US bond market. Estimating the model using Bayesian techniques, we find that a single factor explains most of the variation in bond risk premiums. Furthermore, the model-implied risk premiums account for up to 40% of the variability of one- and two-year excess returns. Using the model to decompose yield spreads into an expectations and a term premium component, we find that, although this decomposition does not seem important to forecast economic activity, it is crucial to forecast inflation for most forecasting horizons.

The industry has benefited from economic growth, favorable legislation and positive trends in the insurance sector for most of the period. The industry includes insurance brokers representing the buyer instead of the insurance company and agencies representing various insurance companies during the purchasing process. The industry is vital to the larger insurance sector as operators act as intermediaries between insurance providers and downstream clients. Operators generate income via commissions earned on policies sold. As a result, industry revenue grows as policy prices and volumes increase. The industry has grown for several reasons. One such reason was rising premium prices on policies sold to consumers. Thanks to rising disposable income and favorable legislative trends, consumers weren’t deterred by rising premium prices and continued to purchase insurance products. The adverse economic effects of high inflation in the latter part of the period have restricted industry revenue growth as consumers and businesses have limited spending on insurance premiums. However, in 2024, inflationary pressures have eased and the Fed has cut interest rates, supporting industry growth as consumers and businesses can spend more on insurance premiums. The Fed is anticipated to cut rates further in 2025 but will monitor various economic data points before deciding on rate cuts. Overall, revenue grew at a CAGR of 1.5% to $234.8 billion over the past five years, including an expected climb of 1.3% in 2025 alone. Industry profit is expected to remain at 18.2% of revenue in the same year. Moving forward, the industry is anticipated to continue its steady growth rate as the overall economy improves despite high inflation, which is expected to linger as further rate cuts will support industry demand. Macroeconomic growth will lead to per capita disposable income growth during the outlook period, enabling consumers to afford goods that require insurance policies like automobiles and personal policies like private health and life insurance. Also, the business sentiment index is expected to climb despite persistently high inflation, leading to higher demand for brokerage of commercial lines of insurance. Inflationary pressures are expected to ease, boosting industry growth as consumers increase spending and demand shifts toward specific insurance niches. Overall, revenue is expected to rise at a CAGR of 0.9% to an estimated $245.9 billion over the five years to 2030.

We identify Treasury supply shocks using auction data, interpreting changes in futures prices around announcements as shocks to expected supply. We isolate the component of futures price variations pertaining to U.S. Treasury announcements between 1998 and 2020. We study how supply affects financial markets through local projections, using shocks as instruments. We show that increases in Treasury supply cause an upward shift of the yield curve fueled partly by a higher term premium. Stock prices decline, volatility climbs and corporate bond yields increase. The risk premium rises, the equity premium falls, inflation expectations soar and the liquidity premium decreases.

The average market risk premium in Australia, that is, the difference between the expected return on a market portfolio and the risk-free rate, remained at *** percent in 2016. This economic indicator is used by investors to determine the expected return on high risk investments, thereby making it important for company valuations and asset allocation decisions.

Australia’s robust economy

Australia recently entered its **** consecutive year of economic growth, backing confidence in the country’s economy. As of the fourth quarter of 2018, the total value of funds under management in Australia amounted to around *** trillion Australian dollars. The market capitalization of listed domestic companies reached a 17-year peak in 2017, indicating a strong valuation of Australian companies. In terms of startups, the number of new investments has been on the rise since the 2015 fiscal year.

International investment

The United States is the leading economic partner of Australia in terms of trade and investment. Responsible for the largest direct investment in Australia, the U.S. has continued to increase its investment in the country over the past years. With regard to industries, the mining and quarrying industry has attracted the most foreign direct investment in Australia.