Bond Outlook January 30th

During the dot.com bubble, from mid-98 to mid-99, the Fed was raising interest rates regularly. At each rise, the stock market fell back for a day or two, and then continued upwards. Much the same phenomenon was present during the period mid-2003 to mid-2005, when regular increases in the Fed rate scarcely slowed the rise in stock prices. The current series of rate cuts looks remarkably like the mirror image of these developments.