(Harvest) Low Treasury yields and high equity prices aren’t necessarily contradictory. Both suggest expectations of continued unexciting growth, low inflation and a steady Fed. What could go wrong? Central banks are usually better at creating asset price bubbles than deflating them before they pop. While it is, of course, far easier to identify bubbles after they burst, the conventional cure for the ensuing economic fallout is the same that created the problem in the first place: monetary stimulus.
Misperceiving Risk and Pricing for Perception
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