Richard Duncan, in his most recent blog post, harped on his interpretations of the ECB nipping QE in the bud by the end of the year. He makes the claim that rising interest rates in Europe will invariably lead to higher rates in the U.S. Can someone explain this train of thought? I am not a subscriber to his Macro Watch service but would be interested to hear people’s insight.
My rudimentary logic: Rising rates in Europe will make European bonds more attractive to savers elsewhere. This will cause demand for treasuries to fall as investors substitute for ECB bonds. Lower demand -> lower prices -> higher yield. I’m sure more goes into this but would appreciate everyone’s thoughts.
Submitted July 07, 2018 at 07:25PM by 11122139 https://ift.tt/2lZvUOD