Please ensure Javascript is enabled for purposes of website accessibility
With High Interest Rates Here to Stay, Investors Could Face More Turbulence in Coming Months
News
By News
Published 7 months ago on
September 28, 2023

Share

Investors are bracing for a prolonged period of high interest rates, triggering a downturn in financial markets. This shift in sentiment was sparked by a series of monetary policy announcements from major central banks, including the U.S. Federal Reserve, the Bank of England, and the European Central Bank. These institutions have signaled that interest rates will remain elevated for an extended period, a message that has been absorbed by bond and foreign exchange markets but has been slower to impact the stock market.

The yield on two-year U.S. Treasuries, a key indicator of near-term monetary policy expectations, has risen from 3.8% in May to 5.1%. Long-term rates have also been on an upward trajectory, with the ten-year U.S. Treasury yield reaching a 16-year high of 4.6%.

Meanwhile, the U.S. dollar has strengthened, buoyed by a robust domestic economy and expectations that U.S. rates will outpace those of other countries. The DXY, a measure of the dollar’s value against six other major currencies, has risen by 7% since July.

Despite these developments, the stock market has been slow to react to the prospect of sustained high interest rates. Investors have remained optimistic about the potential of artificial intelligence and the resilience of the U.S. economy. However, recent disappointing consumer confidence and housing data suggest that this optimism may be misplaced.

If investors are beginning to accept that high interest rates are here to stay, the coming months could bring further market turbulence.

Read more at The Economist.

RELATED TOPICS:

DON'T MISS

Sacramento Gave Homeless Camp a Lease as an Experiment. Here’s What Happened.

DON'T MISS

Merced Supervisors Accused of ‘Triple Crown Race’ of Failures Amid Talk of Closing Fire Stations

DON'T MISS

Teacher Appreciation Week Surprises That Educators Will Love

DON'T MISS

A Mission of Mercy, Then a Fatal Strike: How an Aid Convoy in Gaza Became Israel’s Target

DON'T MISS

Walberg Era Begins With a Charge to ‘Revolutionize’ Bulldogs Basketball

DON'T MISS

California Man Sentenced to 40 Years to Life for Fatal Freeway Shooting of 6-Year-Old Boy

DON'T MISS

16 Clovis Students Rewarded With Scholarships for Their Resilience

DON'T MISS

Dr. Green Thumb’s Is Open. Sweet Flower Debuts Saturday in Fresno Cannabis Rollout.

DON'T MISS

Reacher Star Alan Ritchson Calls Donald Trump a ‘Rapist’

DON'T MISS

Community Leaders Call for Transparency in Fresno Superintendent Search

UP NEXT

Austin Tells Congress Israel Is Taking Steps to Boost Aid to Gaza as Lawmakers Question US Support

UP NEXT

Will China Flood the Globe With EVs, Green Tech? Latest on US-China Trade Fight

UP NEXT

JPMorgan’s Dimon Warns Inflation, Political Polarization, Wars Creating Risks Not Seen Since WWII

UP NEXT

CA Labor Priorities and Business ‘Job Killers’ on a Collision Course

UP NEXT

4.8 Magnitude NYC Earthquake Unnerves the Northeast

UP NEXT

Robust US Job Growth Indicates Continued Economic Strength

UP NEXT

State Department Under Fire for Downplaying Attack on Humanitarian Workers in Gaza

UP NEXT

US Job Openings Rise Modestly to 8.8 Million in February in Strong Labor Market

UP NEXT

Person Catches Bird Flu After Being in Contact With Texas Cows

UP NEXT

Learn the Latest About Bitcoin From Crypto the Wonderdog & Chris Kameir

A Mission of Mercy, Then a Fatal Strike: How an Aid Convoy in Gaza Became Israel’s Target

14 hours ago

Walberg Era Begins With a Charge to ‘Revolutionize’ Bulldogs Basketball

1 day ago

California Man Sentenced to 40 Years to Life for Fatal Freeway Shooting of 6-Year-Old Boy

1 day ago

16 Clovis Students Rewarded With Scholarships for Their Resilience

1 day ago

Dr. Green Thumb’s Is Open. Sweet Flower Debuts Saturday in Fresno Cannabis Rollout.

1 day ago

Reacher Star Alan Ritchson Calls Donald Trump a ‘Rapist’

1 day ago

Community Leaders Call for Transparency in Fresno Superintendent Search

1 day ago

Israeli Settlers Rampage Through a West Bank Village, Killing 1 Palestinian and Wounding 25

1 day ago

US Intelligence Finding Shows China Surging Equipment Sales to Russia to Help War Effort in Ukraine

1 day ago

From Tragedy to Triumph: The Land Before Time Litter’s Journey

1 day ago

Sacramento Gave Homeless Camp a Lease as an Experiment. Here’s What Happened.

When Sacramento changed its plan to demolish a homeless encampment on a vacant lot on Colfax Street, instead offering the homeless occupants...

11 hours ago

11 hours ago

Sacramento Gave Homeless Camp a Lease as an Experiment. Here’s What Happened.

12 hours ago

Merced Supervisors Accused of ‘Triple Crown Race’ of Failures Amid Talk of Closing Fire Stations

13 hours ago

Teacher Appreciation Week Surprises That Educators Will Love

14 hours ago

A Mission of Mercy, Then a Fatal Strike: How an Aid Convoy in Gaza Became Israel’s Target

1 day ago

Walberg Era Begins With a Charge to ‘Revolutionize’ Bulldogs Basketball

1 day ago

California Man Sentenced to 40 Years to Life for Fatal Freeway Shooting of 6-Year-Old Boy

1 day ago

16 Clovis Students Rewarded With Scholarships for Their Resilience

1 day ago

Dr. Green Thumb’s Is Open. Sweet Flower Debuts Saturday in Fresno Cannabis Rollout.

MENU

CONNECT WITH US

Search

Send this to a friend