Levy Says Bond Market to Remain Under Pressure While Inflationary Forces Gather Strength

MOUNT KISCO, N.Y., Feb. 22, 2018 -- David Levy wrote to clients in the February 2018 issue of The Levy Forecast^® that “the bond market is in serious combat with inflation, interest rates, and even fiscal policy,” and that rising U.S. interest rates would threaten global financial stability.

The chairman of the independent Jerome Levy Forecasting Center LLC (www.levyforecast.com) said, “Treasury bonds are in a bear market, and yields are going higher, but neither the domestic nor global economy could weather yield gains of hundreds of basis points.”

Levy wrote, in one of the nation’s oldest publications devoted to forecasting and analyzing economic and business conditions, that rising interest rates would damage the U.S. economy, because “liquidity, solvency, and asset values all depend on exceptionally low interest rates.” However, Levy also noted that “before domestic financial problems threaten the economy, a more precarious stability is likely to break down beyond U.S. borders,” particularly in emerging market economies.

Levy described the U.S. stock market as having the potential to make new highs in coming months but likely more volatile, writing that “. . . the stock market is benefiting from soaring profits and investors’ huge need to pursue capital gains. These forces will continue to compete head-to-head with rising interest rates and evidence that the economy is running too hot . . .the conflicting economic signals are likely to produce dramatic short-term stock market moves in both directions.”

About The Jerome Levy Forecasting Center
The Jerome Levy Forecasting Center LLC – the world leader in applying the macroeconomic Profits Perspective to economic analysis and forecasting – conducts cutting edge economic research and offers consulting services to its clients.  The goal of the Levy Forecasting Center is to improve its clients’ business and investment performance by providing them with powerful insights into economic risks and opportunities – insights that are difficult or even impossible to achieve with conventional approaches to macroeconomic analysis.  Additional information may be found at www.levyforecast.com.

The full Levy Forecast is available to the press in PDF format by contacting Robert King at The Jerome Levy Forecasting Center – [email protected] or 914-666-0641.

The Jerome Levy Forecasting Center
69 South Moger Avenue, Suite 202
Mount Kisco, NY 10549
Robert C. King, 914-666-0641
[email protected]