‘This Fed Put Comes With A Knock-Out Feature’: One Bank’s Caveat To An Otherwise Bullish 2020 Call

‘This Fed Put Comes With A Knock-Out Feature’: One Bank’s Caveat To An Otherwise Bullish 2020 Call

To a certain extent, stocks have been fine with whatever rates wanted to do in 2019. When bonds rallied (yields fell), stocks rose because the proximate cause of falling yields (i.e., trade uncertainty, subdued inflation and signs of economic deceleration) was also a reason to expect a decisively dovish turn from central banks. When bonds sold off (yields rose), stocks rallied because the proximate cause of rising yields (i.e., optimism around a resolution on the trade front and expectations o
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