“core inflation”

If the economy is weakening, why should bonds not rally further? There are several reasons for it: It is far from certain that the US economy will slow down right away. Consumers, whose sentiment has recently weakened considerably, could still continue to live above their means for a while by selling equities or simply borrowing even more, because lending standards are still extremely loose – this certainly among the sub-prime lender desperados. Moreover, wage growth and capital spending has recently seen some upside acceleration, which could, at least partially, off set a slump in the housing sector.

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Source:- IIPM Editorial

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