The head of one of the world’s largest investment banks, Standard Chartered, Bill Winters, in an interview with CNBC, reassured Americans about the future of the national economy amid the situation on the stock market.
According to the financier, the stock market is now subject to speculative excitement, which is fraught with a quick “collapse” of price “bubbles”. At the same time, securities of companies from some sectors, primarily banking, on the contrary, are undervalued.
The general trend in the market is characterized by a tendency to rise in price of shares. This is reflected in the dynamics of futures prices for many indices, including the leading industrial index Dow Jones, futures for which rose in price at the end of February to a record level.
In this regard, some economists fear a rise in inflation, especially against the background of new support programs from the government and the Federal Reserve System (FRS), as well as extremely low rates. An additional factor for concern was the rise in bond yields (which means a decrease in their prices and indirectly indicates a reorientation of investors to the stock market).
However, this situation does not threaten the economy as a whole, Winters is sure. According to him, the Fed’s soft monetary policy and stimulus measures can lead to inflation only in the short term.