Higher-for-Longer and That’s OK - Good News is Good News and Bad News is Good News
Inflation has come in slightly higher than expected for a second straight month. Markets took Tuesday’s CPI data in stride.
Investors are getting used to the idea that interest rates in the U.S. could stay high for longer than they had hoped.
Of course what will ultimately have the bigger impact on markets and the economy isn’t when the Fed starts but where it ends up.
Longer term, the debate hinges on where the so-called neutral rate falls in the current, postpandemic economy.
In this light, Tuesday’s market action, with stocks rising even as rate expectations moved slightly higher, could be a sign that Wall Street is weaning itself off an addiction to low rates.
That certainly would be encouraging.
Wall Street Journal 13 March 2024
Producentpriserna i USA steg mer än väntat i februari.
Ökningen var 0,6 procent jämfört med januari.
Ekonomkåren hade räknat med hälften så mycket.
DI 14 mars 2024
The yield on 10-year US Treasury notes averaged 2.39% in the decade through 2019 — low by historical standards.
It spiked above 5% last October after the Federal Reserve raised rates aggressively to combat inflation, and now, 14 march, sits just below 4.2%.
Till sist uppfattas det av många som normalt – fast det inte är det.
Hans Sjögren, professor i ekonomisk historia, DN 16 Juli 2023
Jag tycker det är skriande uppenbart att räntan världen över är för låg
och att en större del av stimulanserna borde ske via finanspolitiken.
Rolf Englund blogg 5 december 2009
https://englundmacro.blogspot.com/2023/07/vi-har-haft-en-lang-period-av-extremt.html
Powell Is Scaring No One on Wall Street
https://englundmacro.blogspot.com/2024/03/powell-is-scaring-no-one-on-wall-street.html
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