Today on the podcast we are joined by Director of Global Macro Jurrien Timmer to discuss what's moving markets. US equities have been rallying recently, and concerns over prolonged high interest rates seem to be mellowing out as investor sentiment improves. Jurrien notes that the complex relationship between interest rates, earnings growth, and yield curve control is significantly influencing the current market dynamics. Jurrien takes a closer look at the behavior of the bond market, explaining the rise in the 10-year treasury yield due to changes in the term premium, which had been negative during the era of low interest rates. He discusses the potential impact of rising interest rates on equity valuations and the market's anticipation of a soft landing for earnings growth. Jurrien also touches on China's economic challenges and the consequences of excessive debt, potential parallels between China's current situation and historical examples, as well as the differences between policy banks and private banks in China.

Recorded on August 21, 2023.

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