Hatheway: Trump Means Fast Adjustment to Higher Rates

The video discusses the rise in interest rates due to economic factors like borrowing and fiscal stimulus. It highlights a reflationary trend with bond yields increasing since Brexit, driven by global growth and a shift from monetary to fiscal policy. The Trump victory amplifies this trend, suggesting a large fiscal package with tax cuts and infrastructure spending. The market environment is changing, with fears of deflation diminishing and inflation rising. The video concludes with an analysis of the implications for investors and the potential for higher yields.

What are the main reasons for the Federal Reserve to tighten interest rates faster?

• Reduced employment levels

• Increased borrowing and fiscal stimulus

• Decreased global growth

• Lower inflation rates

What does the Trump victory amplify in the market according to the first section?

• A reduction in global growth

• A shift from fiscal to monetary policy

• A shift from monetary to fiscal policy

• A decrease in bond yields

What is a key feature of the large-scale fiscal package discussed in the second section?

• Decreased defense spending

• Tax cuts and infrastructure spending

• Lower corporate taxes

• Increased monetary policy

What economic fear is considered to be over according to the second section?

• Recession

• Stagflation

• Deflation

• Inflation

What is a significant concern for investors in the new market environment?

• Stable interest rates

• Decreasing bond supply

• Rapidly decreasing inflation

• Rapidly rising inflation and yields