Behind the curve
Article Abstract:
The US economy could become less friendly for financial markets according to Morgan Stanley. The number of hours worked is increasing, as are wages. Wage inflation could emerge due to a tight labor market. Interest rates look set to rise in Aug 1996. Rates are likely to be raised to some 7% in the middle of 1997. Financial markets have not taken this level of monetary tightening into account, and Morgan Stanley has a pessimistic view on the performance of bonds.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1996
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Wall Street: deja vue
Article Abstract:
US bond yields have risen in Feb 1996, and the Federal Reserve appears to have decided against lowering interest rates. There are some parallels with 1994, when interest rate expectations also changed, but economic growth is more subdued in 1996. Japanese investors selling long-dated bonds may have led to a weakening of the US bond market and the US dollar. Yields could continue to rise, according to some analysts, while others foresee yields dropping again.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1996
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