Our interest rate outlook is also partly driven by the view that the BoC intentionally wants to lag the Fed in
terms of its tightening cycle.
Not exact matches
Rather than a traditional offsetting relationship at this early point
of the
tightening cycle, the near -
term interest rate outlook and the near -
term profits outlook are both negative.
But this unexpectedly sanguine report was a reminder that the beginning
of a Fed
tightening cycle could be near, and the subsequent selloff is a clear sign that the U.S. market is vulnerable to higher volatility in the near
term, even though we like the long -
term prospects
of stocks.
During the last Fed
tightening cycle, long -
term yields were held down by what former Fed Chair Ben Bernanke dubbed a «Global Savings Glut» — a substantial excess
of desired savings over desired investment.
But this unexpectedly sanguine report was a reminder that the beginning
of a Fed
tightening cycle could be near, and the subsequent selloff is a clear sign that the U.S. market is vulnerable to higher volatility in the near
term, even though we like the long -
term prospects
of stocks.