Falling interest rates not a fait accompli

Livewire Equities


Falling interest rates not a fait accompli. It seems that the current over-riding consensus view is that interest rates will continue to fall globally. Security prices are being influenced by this 'macro factor' much more than they have been historically. More importantly, it seems many market participants are positioned for this 'certain scenario'. We argue falling rates is not a fait accompli. What would happen if interest rates actually rose instead of continuing to fall? The chart below highlights a clear trend of declining US interest rates, with the benchmark US 10 year treasury note yield falling from 6.5% in 2000 to 2.5% currently. What it also shows are some very sharp reversals in rates. Follow the link to read further: (VIEW LINK) @thannon

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