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October 2023
The Rate-Growth Dilemma:
An Elusive Endgame
“He who awaits much can expect little.”
– Gabriel Garcia Marquez
While there are myriad explanations for the sharp move higher in bond yields, they don't seem to have gone up only for the wrong reasons, as growth is holding up better than expected. Nevertheless, asset prices continue to adjust to the “higher for longer” backdrop. Rate stability, better seasonals, and continued growth are notable counters to the recent volatility, but the endgame here remains elusive. How will the rate-growth tradeoff play out?