From goldilocks to taper tantrum 2.0 – a bit of turbulence hits markets. 3 reasons not to be fussed.


From goldilocks to taper tantrum 2.0 - a bit of turbulence hits markets. 3 reasons not to be fussed. This article looks at the recent back up in global bond yields in response to various central bankers talking about an eventual exit from easy money.

The key points are as follows:

  • Central banks beyond the US are edging towards an exit from easy money. This is likely to cause bouts of volatility in shares and a rising trend in bond yields.

  • However, it's unlikely to derail the bull market in shares as any move to tightening reflects stronger growth (and profits), low inflation pressures will keep monetary tightening very gradual (as we have seen in the US) and monetary policy is a long way from being tight.

  • An RBA tightening remains a long way away.

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