A hot topic in the bond markets nowadays is the prospect of America’s central bank, the Federal Reserve, raising its policy target sometime later this year (colloquially referred to as “raising interest rates”).
Counterintuitively, since the U.S. economy is doing “somewhat” well (to use the Fed’s terminology), this may be exactly the wrong action to take.
The Economist newspaper last week dedicated one of its attention-getting “Leader” articles to the topic of lessening the sting of the next recession. In the article titled “Watch Out,” the authors mention that economic recoveries rarely extend longer than a decade, and caution that America’s began six years ago.
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