76 days ago • Posted by William Ramstein
Is a decades' long trend of falling bond yields soon to reverse? Impact on stocks:
Assuming real interest rates are more likely to increase than decrease we expect a weak long-term bonds investment. If real interest rates rise due to faster growth and investment then strong corporate earnings might offset the impact of the higher real interest rates on stock prices. If savings rates were to dip however then there would be no such offset, and stock prices would then become overvalued.