Hello, Quartz Index readers!
The most normal thing about the US these days is its interest rates.
The US Federal Reserve has now hiked its benchmark rate three times in a little over a year. Other major banks have either sat on their hands or cut rates to just above, or indeed below, zero. For now, the long-awaited “normalization” of interest rates—that is, rates that are meaningfully above zero—is largely an American phenomenon.
Although many expected the Fed to be even more aggressive, there is little doubt that more hikes are on the way. The Fed’s economic outlook isn’t nearly as bullish as Donald Trump’s, but if the president follows through on some of his more aggressive spending and protectionist promises, inflation, at least, could accelerate and bring about more hikes.
That’s bad news for US bond investors—prices fall when yields rise—but they’ve had a good run. A 30-year bull market is nothing to sniff at. —Jason Karaian & David Yanofsky
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