‘Tantrum Risk’ In 2 Charts

‘Tantrum Risk’ In 2 Charts

Ok, so if there's anything we learned from Sintra, it's that "tantrum risk" is real. The apparent permanence of the "state of exception" in which we are now forced to invest and trade has seemingly had the effect of reducing the tantrum threshold. That is, the longer rates hug the lower bound, the lower is the "tipping point" beyond which equities interpret rising yields as a risk-off signal. Have a look at this scatterplot: (Goldman) Simply put: if the stock-bond return correlation flips
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