I'm not sure how markets might react. On one hand, you could see the shorts kicking in, pushing it higher, but on the other hand, you could see investors feeling a bit nervous because the Fed is saying things are worse than they thought.
More Quotes from Rory Robertson:
At the corporate level, the big downturn in equity prices has smashed company pension funds, forcing companies to put more money back into their pension plans. Anything that helps to stop the downturn in equities could be helpful.Rory Robertson
The thing that helped the economy so much was a drop in interest rates, which meant lower mortgage rates, which meant consumers have been able to tap the wealth in their homes by refinancing and taking equity out of their homes. With rates having backed up so sharply, refinancing is not such a bargain any more.
Rory Robertson
If gross domestic product prints 2.75 or 3 percent, it's broadly where the market is. People put very little weight on the fact that any pressure on inflation in the U.S. is quite modest and that's breeding low and steady bond yields.
Rory Robertson
There's a perception that the economy is actually doing quite well, in particular the labor market. It's a fairly straightforward assumption the Fed would want to hike rates in March and perhaps in May. You might see bond yields go higher.
Rory Robertson
The sharp rise in mortgage rates that is now under way threatens to limit the refinancing boom, limiting the cash that will be dropped into U.S. consumers' hands during the critical holiday-shopping season.
Rory Robertson
Just as the market overshot on the downside in yield in MayJune, the risk is that it now overshoots on the upside.
Rory Robertson
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