Stock and Bond Markets Diverging

[eytonxav]

It's interesting how the stock and bond/CD markets (interest rates) seem to be going in different directions and that the declining interest rates of late would indicate a less exuberant forward look on the economy than the equity markets. I have been a bit surprised at this rapid decline in interest rates. I wonder if the trade issues get resolved will result in interest rates increasing. What do our forum prognosticators think?

 

[audreyh1]

Divergence in outlooks between stocks and bonds is pretty common. When they diverge, the fun part is guessing which outlook is correct.

The drop in interest rates may be due to: the Fed no longer expressing an aggressive rate tightening stance, the CPI being quite subdued recently.

The CPI drop is probably mostly over now since fuel prices stopped dropping and have recovered half of their late 2018 crash.

 

[Spock]

Interest rates direction hasn't been based on economic data for the last 11 years. Central Banks have completely distorted the market.

 

[eytonxav]

The drop in interest rates may be due to: the Fed no longer expressing an aggressive rate tightening stance, the CPI being quite subdued recently.

Yes, but that is due to Fed concern about a softening economy.

Edit, and I guess less inflationary pressure,