Suddenly, it seems like a growth scare is in the air. Sometimes it isn?t clear where these things come from, but the seeming decision of investors to lighten up a little on equities for bonds and to exit Crude Oil seems to point to an oddly-timed concern about the levels of markets considering economic growth prospects.
To be sure, I concur with the skepticism that the growth we are likely to get ? slow, but with some chances of a relapse ? can support this level of equities. But market interest rates were already pricing in very slow growth (10y real rates below 1%) and increasing inflation; slower growth may quell some of the inflation fears but it is hard to think that real rates are too aggressively high here. And as of the close, they are 7bps lower. 10-year real yields at 0.86%? Those yields are as low as
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