Related: Are High Yield Bonds Too Risky?
Investors are betting on falling prices in the future and opting for even more conservative investments because of their stability.3. Trade Barriers
CNBC’s Jim Cramer responded to the drop, “But, honestly, I’m not sure interest rates are what we need to be super-worried about here,” the Mad Money host said. “I think the bigger short-term worry here is a possible slowdown caused by new barriers to trade that we’re erecting with China now and perhaps many other countries later.”
He went on: “New barriers to trade are being imposed right when they can do the most damage to our economy by boosting inflation, which in turn will force the Federal Reserve to tighten faster than it might otherwise need to.”
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