Report
Why will the correlation between long-term interest rates and share prices be different for a long time?
The normal correlation between long-term interest rates and share prices is positive: they fall in recessions and rise in periods of growth. But we are now moving to a new regime dominated not by the economic cycle, but by liquidity. The abundance of liquidity is leading, at portfolio equilibrium, to a rise in both bond prices and share prices, and therefore to a negative correlation between long-term interest rates and stock market indices .
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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