Zero to Ninety… in Sixty Days
How fast can the market change its mind on interest rates? Head-spinningly fast, as it turns out!
When academics talk about “the market” or “market efficiency,” the underlying assumption is that the price of an asset reflects all known and publicly available information. So, when the price of any asset changes, it reflects the “market’s” assessment of a new fact. And as our famous economist John Maynard Keynes reminds us above, when the facts change, the market reserves the right to change its mind.
April 5, 2022
