All the fund manager presentations are focusing, not on interest rates, but they’re controlling parent, bond yields. This is what the markets (ie the guys who are the main recipients of bankers’ bonuses) think interest rates are likely to be sooner and often very much later. So if you have a ‘bond’, a loan to a company or government, which says it will pay 4% a year for 5 years, and you think rates will be, say, 5%, that 4% bond will be worth less than it’s face value. And vice verse. Currently, they think they’re going to be higher for longer; which means bond yields are up; which isn’t desperately good news. That’s very short term not good news however, and any small indication that inflation is coming down can (and will) change everything very quickly. Which is why the long-term is all.
“Bank of mum and dad drives economic inequalities”
Not sure if there are any surprises or changes to the world order here. It was ever thus, that more educated and affluent parents can give their kids better life choices and opportunities…
