US stocks have surged to new all-time highs while US bond yields have fallen below 2%. In the past, strong equities were associated with higher yields, but that’s clearly not the case right now. This reveals the influence of expected low policy rates from central banks on asset markets. This week’s two major announcements, first that President Trump wants to nominate two apparent doves to the FOMC (Judy Shelton and Chris Waller), and second that the probable successor to Draghi as ECB president is Christine Lagarde, only add to the drumbeat of dovish news. It also helps that the G20 meeting ended with US and China truce. Pessimistic investors…
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