UBS have warned of central bank interest rates getting tighter despite European and US inflation numbers once again coming in lower than markets have been expecting.
UBS says that with CPI rates dropping so rapidly in effect real interest rates set by central banks are rising more rapidly. Real rates are interest rates minus the inflation rate (as a really brief explanation). In addition say the analysts, the full impact of past monetary tightening has yet to be felt.
I just posted this chart of the US benchmark S&P 500 in relation to warnings from Morgan Stanley. Stocks shrugging it all off:
