Promising the Moon
Updated: Nov 13, 2019
■ Equity investors looked past slowing global growth and corporate earnings with high hopes that dovish central banks will be able to reignite the global engines of trade and growth.
■ Lower inflation and expectations of rate cuts drove global bond yields to record lows during the quarter.
■ The Federal Reserve appears willing to further ease financial conditions, which are already accommodative, even with low unemployment levels and elevated stock valuations.
■ There are reasons to be concerned: cutting interest rates risks fueling growing economic and market imbalances while not cutting rates could jeopardize the longest U.S. expansion in history.