OPINION: Restoring price stability will require a long-term demand constraint tough enough to match the commodity supply reduction. That implies an increase in U.S. interest rates to 5%, 6%, or 7%.
LONDON — Do you believe in fairy tales? If so, you could probably earn good money nowadays as a financial trader or gain power and prestige as a central banker.
Investors’ optimism can be seen in the trillions of dollars staked recently on three closely related market bets. Money markets are now predicting that U.S. interest rates FF00, +0.00% will peak at below 3.5% in January 2023 and then decline starting from next April to around 2.5% in early 2024. Bond markets TMUBMUSD10Y, 2.767% are priced for U.S. inflation to collapse from 9.1% today to just 2.8% in December 2023. And equity markets SPX, -0.12% DJIA, +0.09% GDOW, -0.
The first cognitive bias is to downplay and defy geopolitics—a view summed up by Nathan Rothschild’s legendary instruction in the Napoleonic Wars to “buy on the sound of cannons.” Professional investors take pride in trading against panicky retail investors who sell their assets because of wars. Many investors accordingly believe that monetary conditions have become very tight because central banks have raised interest rates in increments of 0.75 percentage points instead of the usual 0.25 percentage points, despite the fact that rates are still much lower than in any previous tightening cycle.
México Últimas Noticias, México Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
Opinion | Why Isn't the Media Talking About Banning Nuclear Weapons?'It's of critical importance—indeed, existential importance—to the world: the Treaty on the Prohibition of Nuclear Weapons. And a coalition of peace organizations in the United States is charging that media are acting like the treaty 'does not exist.''
Leer más »
Opinion | Why I fear Indiana, not Kansas, charts the future of abortion rights in AmericaOpinion by Ruth Marcus: Why I fear Indiana, not Kansas, charts the future of abortion rights in America
Leer más »
Opinion | Why an FBI raid won't stop Trump from running in 2024 — and might encourage himDennis Afergut: Donald Trump may believe that an indictment could help his political profile, promoting his longtime campaign theme of being an aggrieved martyr. - NBCNewsTHINK
Leer más »
One dead, four injured in Palmdale crashPreliminary information indicated a vehicle making a left turn from 55th Street East to Palmdale Boulevard crashed into two vehicles, said Lt. Oscar Martinez of the Palmdale Sheriff's Station.
Leer más »
'Targeted killings': US police suspect murder of four Muslim men are linkedPolice in New Mexico’s largest city and federal agencies are trying to determine if the ambush shooting deaths of three Muslim men over the past nine months could be connected.
Leer más »