DAMBISA MOYO
LONDON – Although geopolitical and policy-induced uncertainty is a dominant concern across the world’s financial markets, there appears to be a disconnect between headlines and broader media narratives, on the one hand, and investors’ relative calmness, reflected in key financial metrics, on the other. Are we witnessing market complacency?
Consider CNN’s Fear & Greed Index of investor sentiment. It has been trending from fear back toward neutral, despite all the political, international, and policy chaos of the past few months. True, professional investors do not generally cite this metric, suggesting that it is more a reflection of retail-investor sentiment or marketing. But other metrics tell the same story. US real interest rates may be nowhere near the zero bound of previous years, but after a period of higher interest rates to combat pandemic-era inflation, they have been on a downward path.
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