Switches between four asset classes: Sight deposits and passbook accounts; term deposits and money market funds; bonds and equities

We need to analyse switches between four asset classes in order to forecast long-term interest rate and stock price trends (we do this for the United States and the euro zone). The re was switch from sight deposits and passbook accounts to term deposits and money market funds, between 2002 and 2007 and since 2022, in response to the rise in central bank intervention rates. Then there is the possibility of switching from sight deposits and passbook accounts to bonds, because they provide a higher yield than sight deposits (and passbook accounts). Such a switch limits the rise in bond interest rates. It took place from 2002 to 2007, in 2018-2019 and since 2022. Lastly, there is the possibility of switching from term deposits and money market funds to equities, due to the high return on equities. It takes place as a trend, except during periods of falling share prices (2002, 2008-2009, 2020, 2022). When central banks start cutting interest rates, the attraction of term deposits and money market funds will be reduced. Investors will probably switch back to bonds, leading to a fall in long-term interest rates as well, and back to equities, leading to an even greater rise in share prices.