Bank of America’s investment arm has offered some soothing words to investors fretting about an imminent meltdown in global equities and a resulting slowdown.
The investment community have been busy watching the recent trend in bond yields this year, with many commentators predicting that the current economic cycle could be reaching a peak. The “flattening of the yield curve” — where short-term interest rates get closer to the long-term rates — has sparked some fears that a recession is around the corner. In a normal functioning economy, short-term lending has fewer risks — the underlying thought is that you can more easily predict what’s happening tomorrow rather next month.