- Are interest rates on long-term bonds rising because of expectations of post-Coronavirus Recession growth? Or are they rising because the specter of inflation is becoming a real problem?
- The Federal Reserve, for its part, announced on Wednesday, 17 March, 2021 that it would keep the short-term interest rates it controls at or near the zero level, indicating they are willing to allow inflation room to rise.
- The sudden arrival of negative short-term interest rates and rising long-term interest rates spells turmoil for the bond market, which will affect the stock market.
For further details see:
Bond Market Turmoil And The S&P 500