Will Janet Yellen Pull the Trigger? | Andy Constan
Forward Guidance
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How Bond Risk Premiums Affect Stock Prices
Bond risk premiums have a negative correlation with stock prices. Stocks go up when growth rises, and bonds go down when it falls. In the last tightening cycle in 94, bond risk premiums exploded as stocks fell. So what happened in 2020 is growth went to zero? And so stocks fell. And bonds saw growth going to zero, so they railed.
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