Markets are heavily influenced by narratives – a set of stories about what is happening and what is likely to happen. Sometimes those narratives are challenged, leading to a repricing. Sometimes the narratives change, and investors latch onto a new one. And sometimes, the narrative changes without anyone paying much attention. During February, the narrative around central banks cutting rates aggressively, and soon, was challenged. While the bond market noticed and repriced, the equity market carried on regardless.
Read more in the latest issue of Prosperity.