This is the root cause of why I can't make money this year.
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大夫
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Just how serious is inflation in the U.S.? After losing money this past year, I finally understand
The fact is, rate hikes themselves aren’t an unequivocal negative for U.S. stocks or Bitcoin.
Rate hikes are driven by inflation and an overheated economy, so they aren’t entirely unexpected bad news for the market.
In fact, U.S. nominal interest rates are high, at around 4%, but inflation in the U.S. is also high, hovering around 3%.
So the U.S. real interest rate has actually been around 1% all along.
On the Chinese internet, a 5% Treasury yield has long been treated as a major negative for U.S. stocks. That’s simply because, after spending so long in an environment where Treasury yields were at 1.8%, people have lost the ability to imagine inflation. We once had a period of economic overheating too; it’s just that so much time has passed that our memories of it have grown hazy.
Rate hikes are driven by inflation and an overheated economy, so they aren’t entirely unexpected bad news for the market.
In fact, U.S. nominal interest rates are high, at around 4%, but inflation in the U.S. is also high, hovering around 3%.
So the U.S. real interest rate has actually been around 1% all along.
On the Chinese internet, a 5% Treasury yield has long been treated as a major negative for U.S. stocks. That’s simply because, after spending so long in an environment where Treasury yields were at 1.8%, people have lost the ability to imagine inflation. We once had a period of economic overheating too; it’s just that so much time has passed that our memories of it have grown hazy.
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