I was wondering why the stock market remains quite good in October, despite so much inflation pressure. There was an interesting explanation yesterday in the Financial Times : all the inflation pressures is reflected in short term interest rates, which have strongly increased both in the UK and the US since October. But long term rates have not moved much during the same period. In fact, 2 year government bond yield and 30 year are moving in the opposite direction in the US. We know that's a key point, as the valuation of shares is much more influenced by long term rates than short term rates.
Main explanation given in the FT article for such a move for long term rates : if the Fed increases interest rates, it will slow growth.
