Five charts to start your day

How well does the market predict the trajectory of interest rates?

Where are interest rates heading? That is the question being asked by investors at the start of 2024. Let's see what the market is pricing in.

Simply watch the first 30 seconds of the video to grasp the essence of the story. The market frequently overestimates or underestimates the path of interest rates. It took approximately 12 years of flat interest rates before interest rates began rising following the pandemic.

For much of that time period, markets persistently anticipated interest rates to return to their pre-2008 Financial Crisis level. However, this never materialised. Ironically, as soon as interest rates began to rise, the market began pricing in potential future interest rate cuts.

So where does that leave us? Here’s an idea.

"The long run is a misleading guide to current affairs. In the long run, we are all dead," John Maynard Keynes wrote in his 1923 work, "A Tract on Monetary Reform."

It makes one ponder, doesn't it?

Source: Eeagli

Coming up:

• Japan’s Nikkei 225 stock index hits a record 33-year high

• The Magnificent Seven is larger than all other stock markets (ex US)

• The global risk of a Taiwan War

• The environmental impact of foods

If you like what you see here, and you would like to view the other four charts, consider becoming a paid subscriber. It costs less than two cups of coffee for a whole month’s access.