All-time low negative real interest rates are apt to create excesses and poor future returns, said Lisa Shalett, CIO of Morgan Stanley Wealth Management.
The Federal Reserve’s easy monetary policy and the spike in the pace of inflation have left investors with negative real interest rates, which are fuel for asset bubbles, warned the chief investment officer of Morgan Stanley’s wealth management division.
Last week Fed Chair Jerome Powell stuck with “a policy of patience” on the timing of raising its benchmark interest rate, she said, describing the outcome of the central bank’s policy meeting as “decidedly dovish, especially given the chair’s ebullient economic outlook.” “Risks of a market bubble are growing,” Shalett said. She suggested that investors “watch labor market data, valuations on 2022 forward earnings and fear/greed positioning gauges, which are closing in on extreme overbought conditions.”
“The Fed will reduce monthly $120 billion purchases of US Treasurys by $10 billion a month and $5 billion a month for mortgage-backed securities, signaling its intent to leave interest rates essentially unchanged until June,” Shalett wrote. “Almost on cue, equity investors marked the central bank’s commitment to “lower for longer” rates with yet more new all-time highs, leaving valuations stretched.”The U.S.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Kieran Culkin SNL Sketches Ranked: New Trump, Dionne Warwick and Tracy Morgan Drop InCecily Strong gets personal, makes a powerful statement about abortion rights dressed as a clown as 'SNL' tackles GOP victories, Aaron Rodgers and Ice Cube vaccine controversies and more!
Read more »
Tracy Morgan Makes Surprise Cameo on 'SNL'The former cast member dropped by in one of the sketches featured in Saturday's episode.
Read more »
Yes, Debra Morgan Is Coming Back to 'Dexter: New Blood,' but It's Not What You ThinkLet Jennifer Carpenter set the record straight on Deb's TV fate.
Read more »
Heather Morgan Becomes First Woman to Lead Will Rogers Pioneers Foundation (Exclusive)Morgan, a rising star in the exhibition business, is vp of content and programming at Harkins Theatres.
Read more »
UN says over 3 million in Myanmar need 'life-saving' aidA low level civil war in the country risks pushing millions into poverty and in need of growing humanitarian assistance.
Read more »
What some say is behind crypto record rally to $3 trillion as Ether surgesThe total cryptocurrency market tops $3 trillion Monday, for the first time, according to data from CoinGecko. Market capitalization of the crypto market has...
Read more »