Can You See the Forest for the Trees?

Misdirected Focus

The continual media focus on interest rate changes is missing the point to some degree – it’s paying attention to the ripple in the wave rather than the action in the tide. You need to look through these and seek what the indicators are actually trying to do on a larger level.

If everyone is paying attention to interest rate activity, then everyone will be making the same move around it. Since everyone is moving in the same direction based on the same information, it may already be a non-event. There will, of course, always be knee-jerk reactions, but that’s failing to see the forest for the trees. Given the recent jump in bond yields, it’s hard to conceive of a response that would be viewed as significant, since an increase in rates certainly won’t be a surprise.

- Greg Stewart, CIO