Central Banks vs. Equity Markets: Is the Tail Wagging the Dog?

2019 Midyear Insights

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By Cleo Chang - July 25, 2019

Central banks working together is not necessarily a case of the tail wagging the dog. Rather, it’s the fact that there exist deep-rooted relationships in the global markets that affect how investors evaluate risks and returns.

Globally speaking, central banks have been very accommodative for many years. However, that doesn’t prevent investors from reacting negatively when they hear a more hawkish tone. The European Central Bank, the Bank of Japan and the Federal Reserve have all experienced this when attempting to take their feet off the easing pedal. With Europe and Japan not being able to move rates up in a meaningful way, it may serve as an anchor for what the U.S. can do.

Watch my latest video to find out where I think rates are headed and how global central bank efforts, as well as market disparities, affect investor perceptions.

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