Central Banks Going Softly, Softly Revive Greenspan's Conundrum
- Even as Fed and BOE lift interest rates, asset prices head up
- Trend is reminiscent of the puzzle Fed chief faced in 2005
Principal Global Investors Sees Dovish Tightening Cycle
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Alan Greenspan’s conundrum is back, and central bankers’ new-found love of treating markets with kid gloves is playing a large part.
While the U.S. Federal Reserve is expected to raise interest rates for the third time this year, and officials expect another three hikes in 2018, benchmark U.S. bond yields have remained stubbornly low through 2017 and the gap between short and long-term rates has flattened.