As we wrote last week, bond yields are meaningfully higher, and global equities are generally flat year-to-date. Real bond yields are rising, reflecting the re-ignition of our $20 trillion economy. Positive real bond yields are normal. A positive Treasury term premium underpins a free market economy. The transition away from the pandemic will be bumpy. The same for risk assets. On average, the stock market pulls back by 5% roughly three times a year and by 10% once a year. Again, on average.
Wobble
Wobble
Wobble
As we wrote last week, bond yields are meaningfully higher, and global equities are generally flat year-to-date. Real bond yields are rising, reflecting the re-ignition of our $20 trillion economy. Positive real bond yields are normal. A positive Treasury term premium underpins a free market economy. The transition away from the pandemic will be bumpy. The same for risk assets. On average, the stock market pulls back by 5% roughly three times a year and by 10% once a year. Again, on average.