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In financial markets its pretty simple: When you raise interest rates, you increase the denominator in the DCF calculation, so most assets are repriced downward
by mamonster 4y ago
In financial markets its pretty simple: When you raise interest rates, you increase the denominator in the DCF calculation, so most assets are repriced downward.
- karatinversion 4y agoBut asset prices aren’t included in inflation indices…
- makomk 4y agoYeah, the decrease in asset prices is just an unavoidable side effect (and similiarly, the increase in asset prices under the previous low-interest, low-inflation environment was a side effect of attempts to boost inflation and the real economy, not some large scale plot to transfer money to the super wealthy as is often claimed).