← Go back Dec 12, 2023
Bitcoin is at its highest price for more than 18 months. The US sharemarket is up more than 10 per cent in six weeks. US bonds have had the best month in decades. The gold price hit a record on Monday. Almost everything in the markets is surging. There is a straightforward explanation for why most of the major financial asset classes have roared back. Sharemarkets around the world are soaring. Credit: AP Investors have discarded the “high for longer” view on interest rates that the US Federal Reserve Board was promulgating earlier in the year and are now increasingly pricing in a conviction that rates will be falling next year, perhaps as early as May. They are also betting on the US reaching the Fed’s target of two per cent inflation without any significant damage to the economy, achieving the “Goldilocks” outcome of a soft landing that avoids recession. They may or may not be right but those bets are large. Loading Since the markets started surging in mid to late October the sharemarket is up 11 per cent, with the more tech-oriented Nasdaq index up nearly 13 per cent. The yield on two-year Treasury notes has fallen back from 5.22 per cent to 6.4 per cent and the yield on 10-year bonds from 4.99 per cent to 4.25 per cent. As yields fall the prices of bonds rise, generating gains for bond investors. The gold price hit a record of $US2135.39 an ounce on Monday before falling back slightly, while Bitcoin, trading at $US42,259 on Monday, is up nearly 60 per cent in less than two months. That’s the highest it’s been since the collapse of the Terra USD stablecoin in May last year blew up the market for crypto assets.
Read more: watoday
