Market Uncertainty Now Is As Extreme As It Gets: Everything Risk
Raphael Bostic, president and chief executive officer of the Federal Reserve Bank of Atlanta, during a Bloomberg Television interview in Atlanta, Georgia, US, on Friday, Nov. 3, 2023. Bostic said policymakers have time to watch how the economy is evolving and be patient when it comes to interest-rate moves. He has been out in front of other Fed officials in calling for a long pause.
Photographer: Elijah Nouvelage/BloombergDouble-digit equity returns are a lot sexier than low single-digit bond ones. But the risk-reward has shifted toward bonds given a likely continued mean reversion of long-term equity returns. With economic uncertainty high, it pays to lock in the highest fixed-income returns we’ve seen in a decade and a half. In a worst-case economic scenario, even Treasuries could see equity-like returns due to capital gains as equities wilt.
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