You don’t need to follow financial news every day to keep up with markets and the economy. You just need a sharp weekly summary of what really matters. Here’s The Point:
Markets are normalizing as the US-Iran war morphs into a series of occasional flare-ups and tankers speed through the Strait of Hormuz. Oil prices are almost back to pre-war levels. Inflation is likely to drop. The stock market is once again consumed with the artificial-intelligence buildout, rather than geopolitics.
But interest rates remain curiously high. The 10-year Treasury, which sets the rates on most business and consumer loans, is at around 4.5%, more than half a point higher than it was before the war. Mortgage rates are near 6.5%, also half a point higher than pre-war levels. Unlike oil prices, rates have gone up and stayed up.
What is that telling us?
The bond market is the grown-up of the investing world, rationally processing data amid exuberance or panic in the stock market. It could be sending three different messages.