Sunday, February 18, 2018
Inflation and Stocks Are Both Up, And That's Stirring Some Worries
It's long been believed that inflation and higher interest rates are bad for stock prices. Now, it's unclear how the markets will react. Consumer prices rose more than expected in January, and interest rates jumped. Nearly all mainstream economists agree that at some point, higher interest rated and inflation hurt stock prices. Investors are right to be concerned. If this is in fact that last stage of the long-running bull market, and interest rates continue to rise, some spectators typically preform better than others. During the last year of the bull market, the best preforming sectors have been energy, health care, and technology. No one knows for sure when the bull market will end, of course, or weather it already has. Clearly, investors are one edge because of this.
https://www.nytimes.com/2018/02/15/business/inflation-stocks-interest-rates.html?rref=collection%2Ftimestopic%2FEconomics&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
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This is an interesting article because it shows that the fact the Fed has been increasing the interest rates for a long time now, and this might end up affecting the stock market. There are some experts that are concerned about the fact that stock markets have not been affected yet because some of them think if it doesn't happen gradually, then there's going to be a market correction or a market crash that could cause a recession. It will be interesting to see how the Fed is going to react in order to not let this happen, and if there is actually a way to avoid this market crash and avoid going into a recession.
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