Investors fear inflation, higher yields may make U.S. equities ‘dead money’
Posted: Fri Mar 10, 2023 5:56 am
Investors fear inflation, higher yields may make U.S. equities ‘dead money’
https://www.theglobeandmail.com/investi ... ead-money/
Renewed hawkishness from the Federal Reserve is pushing investors to game out how a regime of “higher for longer” interest rates could weigh on U.S. stocks. Some believe they may be in for a slog.
While stocks have managed to advance during periods when rates were around current levels, some investors are worried a combination of higher bond yields and sticky inflation bodes poorly for equity returns if the Fed follows through on the message of higher and potentially faster rate increases Chairman Jerome Powell delivered this week.
Jonathan Golub, managing director at Credit Suisse, is among those with a bleak outlook for equities. He described an environment in which persistent inflation squeezes companies’ profit margins and investors spurn stocks in favor of Treasuries and other short-term debt, where yields are at their highest levels in nearly two decades for some maturities.
https://www.theglobeandmail.com/investi ... ead-money/
Renewed hawkishness from the Federal Reserve is pushing investors to game out how a regime of “higher for longer” interest rates could weigh on U.S. stocks. Some believe they may be in for a slog.
While stocks have managed to advance during periods when rates were around current levels, some investors are worried a combination of higher bond yields and sticky inflation bodes poorly for equity returns if the Fed follows through on the message of higher and potentially faster rate increases Chairman Jerome Powell delivered this week.
Jonathan Golub, managing director at Credit Suisse, is among those with a bleak outlook for equities. He described an environment in which persistent inflation squeezes companies’ profit margins and investors spurn stocks in favor of Treasuries and other short-term debt, where yields are at their highest levels in nearly two decades for some maturities.