The share price and interest rate configuration since the start of 2019

We look at the situations of the United States and the euro zone. The following configuration has been present since the start of 2019: Declining long-term interest rates; Rising share prices. This does not correspond to a scenario of economic growth (when both interest rates and share prices would have risen ) or one of recession (when both interest rates and share prices would have fallen ). It is consistent with the combination of the following two factors : Expansionary monetary policies ( hence low interest rates and support for equity valuation); A slowdown in growth not acco mpanied by a fall in corporate profitability ( hence low interest rates and rising share prices thanks to rising corporate earnings). This configuration is indeed present. As long as it lasts, long-term interest rates will remain low and share prices will rise.