The era of "Great Moderation", where bond yields and stock prices are positively correlated, could be over. But it could be entering what one strategist refers to as "the temperamental era", moving toward uncertainty and volatility in markets.
Charles Schwab Chief Investment Strategist Liz Ann Sonders joins Yahoo Finance Reporter Josh Schafer for the latest edition of Yahoo Finance's Chartbook, to discuss these periods in the market and the impact they can have on markets in both long and short-term periods:
"There may be a bit more volatility than what we are used to longer term, but let's hope, and probably not to the same degree that we saw it last year. We've been in this unique cycle, it's often said that the Fed takes the escalator up when they're hiking rates, and the escalator down — this one's been at the opposite. They took the elevator up, and I guess they'll take the escalator down. But because they are operating on the data dependency, and they are simultaneously doing QT [quantitative tightening], that has been sort of a force behind higher volatility in the fixed-income side, even more so than on the equities side.
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