Will yield curve control drive new stock bubble highs?

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Some charts from BofAML:

What is remarkable about this first YCC period – when the Fed capped yields at 2.5% to allow Treasury to fund cheap debt in WWII – is that as BofA’s Michael Hartnett points out it coincided with start of a huge rally in US stocks…

… multiple expansion as PEs soared from 7.7x in March 1942 to 22x in 2 years, nearly tripling over a very short period of time…

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.