In today’s briefing:
- Angst of Rising Real Interest Rates Haunts US Financial Markets as Profit Forecasts Fail to Impress
Angst of Rising Real Interest Rates Haunts US Financial Markets as Profit Forecasts Fail to Impress
- The future trajectory of US Treasury yields depends on investors’ perceptions whether the Fed has taken the necessary steps to quell inflation. Significant quantitative tightening will not occur until September.
- The Fed engineered lower real yields over the past forty years, albeit at varying speeds. Lower real yields since 2008 have boosted leverage in the corporate and federal government sectors.
- US equities are facing the perfect storm in the form of rising interest rates and uncertainty about the economic and corporate profit outlooks. Investors are not trusting corporate profit forecasts.
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