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The Recession Paradox | Alfonso Peccatiello

Forward Guidance

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The Fed's Quantitative Tightening and the Stock Markets

In 2006, do you remember where Fed funds were, Jack? I think they were 5.25%, maybe. So they were over 5%. And the Fed stopped and kept Fed funds at over 5% for 18 months. Stocks have been outperforming bonds by a considerable degree during quantitative tightening. Do you think that challenges the commonly held belief that high interest rates as well are bad for stocks?

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