Late last year, around this time or perhaps a few weeks later, in November, the market was anticipating that the Federal Reserve would cut rates up to seven times this year. The world’s leading investment asset It experienced a bullish bacchanal which took it from 5% to 3.75%.
While this formidable whirlwind in favor of fixed income has been diluted, materialized so far by only two falls in the price of silver in the United States, expandable to a third at the December meeting; The reality is that US bonds have reached levels of almost 4.5%. It’s no joke when you think that the number one investment asset in the world, the one that people confuse with insurance because it’s fixed income, von track to close the year with a 5% loss.
A few weeks ago, I expressed my bewilderment that the debt management company’s chief debt officer, T. Rowe Price, suggested that 10-year U.S. Treasuries could reach a key level of 5% in the next six months due to rising inflationary expectations and concerns over US fiscal spending. A photo outside the consensus, but which demonstrates this principle Picassoword now that we have learned that it was García Lorca who invented itthat everything you can imagine is real.
We imagine that Trump is a schizophrenic and psychotic barbarian, not at all with the strategic and tactical style of the Viking Ragnar Lodbrok, who with his tariffs and his expulsions of immigrants will trigger inflation in the United States to crazy levels and end up destroying full employment. But just as fixed income securities wanted to imagine absolute budgetary indiscipline, a lack of budgetary control and an inflationary rebound as with Covid; The stock market wanted to come up with another acceptable term for the self-centered and abusive Trump. Despite the pandemic, the balance posted by Wall Street during his mandate was almost 70%. Better than that of his Republican predecessors: George Bush senior finished his mandate with 50% and his son with heavy losses, but let us remember that he swallowed Lehman. Trump, of course, falls far short of idolized liberal Ronald Reagan (120%). But let’s not forget that it is former Democratic presidents Bill Clinton – the only one to have left surpluses in recent decades – and Barack Obama who have the best records, 207% and 168%. Of course, Biden is so sad that his record is slightly worse than Trump’s.
The Stock Exchange imagined that growth was assured. And if this objective is respected, we are certainly not talking about exuberant prices. Even if it is best, as Fed Chairman Jerome Powell did, to assert that “we do not predict anything, we do not speculate, and we do not reach conclusions.”
