Crises often erupt suddenly! Strategist: "Higher and longer" interest rates will soon be challenged

Macro strategist Simon White said，Interest rate markets have come to accept central bankers' mantra that "high interest rates will last longer"。But，If the economy is closer than the data suggestrecession，This claim may soon be tested。

existLast week at the Jackson Hole Symposium，Central bankers have not dispelled their intentionsexistMaintain interest rates for a longer period of timeexistHigh opinion。

existUnited States，Since June，The actual peak of SOFR, a broad measure of the cost of funds borrowed overnight against U.S. Treasuries, has remained constantexist2% or more。Short-term real yields are also at historically high levels，The yield on two-year inflation-protected bonds (TIPS) is near its highest level since 2004 (excluding the financial crisis highs).。

Real interest rates in the UK and Europe are rapidly catching up with those in the US，But still below zero。But，Based on the expected level of short-term interest rates and CPI fixed swaps，The real policy rates of the Bank of England and the European Central Bank will both turn positive by October。

The European Central Bank's real interest rate is expected to remain unchangedexistAbout 1%，However, the real interest rate in the UK is expected to increaseexistIt will continue to rise to more than 3% in the first half of next year。existUnited States，Real interest rates are expected to remain unchanged over the next 12 monthsexist2%-3%。currently，The market isexistAccept signals of prolonged high interest rates。

But this austerity environment will beMore likefall intorecessioneconomyconditionconflict，This willA test of the central bank's resolve to keep interest rates high。The poor PMI indices in Europe and the UK are a reminder，The economy is very fragile。The problem with economic growth being so close to zeroexistat，The central bank just needs to tighten a little bit more，The economy will fall intorecession。

White said，recessionOften suddenlyhappen，And usuallyexistWhen it looks good on the surface。

Take the United States as an example.。Although Wall Street generally believes that the US economy is expected to achieve a soft landing，ButThere are some reliable indicators that still suggest，recentIts economyWill appearrecession。

The chart below shows the year-over-year increase in jobless claims by state in the United States this year，And every time since 1990recessionMedian。The path of the past year (black line) andrecessionThe paths (yellow lines) are similar。

This is not about the economyrecessionIt's a foregone conclusion.，But such an indicator should not be ignored，Because it captures on the one handrecessionUniversality (in many places)situationIt gets worse at the same time.，On the other hand, it captures the essence of its phased changes。Industrial foreign exchangeWarning，situationIt looks very good...existTheyBefore the crash。

The irony is that，The Federal Reserve may have toexistThey try to convey theirexistMaintaining high interest rates for a longer period of timeTime to give upThis idea。