What Will Be The Effect On Markets?

The inflationary pressures produced by COVID-related supply disruptions have been greater and appear to be more persistent than at first thought. One result has been a sharp rise in expectations that the Fed will implement a series of rate increases in 2022.

The prospect of rising interest rates has yet…

Positive Results Are At Historic Highs

Investor sentiment is the prime driver of market trends and sentiment is largely formed by developments (good or bad) that deviate from expectations. Therefore, conditions that play a significant role in forming investor perceptions are worthy of attention.

The sharp rebound by a US economy boosted by unprecedented monetary and…

What Will happen When Interest Rates Start To Return To Historic Norms?

If we need reminding of the unprecedented economic times in which we live, the accompanying chart will provide useful context. Despite the sharp stimulus produced economic rebound from the COVID-induced shock of 2020 and the subsequent inflationary pressures produced by stubbornly persistent supply disruptions, interest rates remain at 5000-year lows!

Will This Unprecedented Situation Continue?

The factors that have produced the current negative return environment: negative real interest rates and stock markets driven to valuation peaks by unjustified investor expectations are major reasons why we view the current risk/reward prospects offered by markets are less than compelling.

The resolution of this problem must involve either…

Jonathan Baird CFA

PUBLISHER OF THE GLOBAL INVESTMENT LETTER. AWARD-WINNING MONEY MANAGER. SPEAKER ON GEOPOLITICS AND MARKETS. www.globalinvestmentletter.com

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