2023-10-14 19:13:24
Washington: The building of the US Federal Reserve (Fed) Image: dpa
There is a big sell-off in the bond market. Yields are as high as they were before the financial crisis. That’s not a reason to panic per se, but the pace of adjustment doesn’t bode well.
Sometimes you ignore something until you simply can’t ignore it anymore. This even happens to professionals: Until recently, investors clung to the assumption that central banks would soon lower interest rates again after they had recently reached their supposed peak.
But now the stock market is realizing more and more how naive this belief was: interest rates will remain high for now, the central banks are crystal clear about that. This is accompanied by a painful adjustment process in the bond market. Investors are throwing the securities that they had bought as a good-yielding safety buffer out of their portfolios.
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