For two years, market observers have been predicting a recession. Why? They’ve pointed to what’s known as an inverted yield curve—when short-term interest rates are higher than long-term rates. Historically, this has been a bad omen for the economy, and that’s why investors have been worried. The [...]
Suddenly more interesting
In a typical year, the bond market doesn’t attract much interest. That is by design. The role of bonds in a portfolio is to serve as a bulwark against the unpredictability of stocks. They’re supposed to be boring. All that changed this year. Owing to rising interest rates, the most common total [...]
Walking the highwire
I have to say, I don’t envy the folks in Washington. Last year, many accused Federal Reserve policymakers of being asleep at the wheel as they downplayed the risk of rising inflation. This year, of course, it’s been the opposite: The Fed has been in overdrive, raising interest rates aggressively. So [...]
Dark horse inflation fighter
Inflation this year has been running at more than four times the Federal Reserve’s target of 2%, forcing the central bank to raise interest rates multiple times. As a result, both the stock market and the bond market have been struggling. This has investors searching for alternatives. At the top [...]
Inflation answers
Open an economics textbook, and you’ll find this fundamental principle: When the money supply expands—that is, when the government prints more money—higher inflation is often the result. This topic has, for good reason, been on investors’ minds lately. Since the pandemic began, the Federal Reserve [...]