Signal Over Noise: Will Higher Rates Derail The Equity Rally?

Despite a recent 'bear steepener' in the Treasury curve, the US equity bull market remains supported by strong global growth and AI investment. Higher rates are viewed as a temporary headwind rather than a structural signal to sell.

Key Takeaways

• 1.Higher interest rates are unlikely to derail the equity bull market as long as growth remains strong, though short-term volatility/indigestion may occur.
• 2.The US equity bull market is supported by three 'legs': strong global fiscal expansion, robust US consumer spending, and surging corporate AI data center capex.
• 3.Current 10-year real rates are near 2.0%, approaching the 2.0-2.5% level history suggests can be 'tricky' for equities, but recent moves are viewed as noise rather than a sell-off signal.

Table of Contents

• Signal over Noise: Will higher rates derail the equity rally?
• Global asset class preferences definitions
• Appendix
• Risk information
• Generic investment research – Risk information
• Important Information About Sustainable Investing Strategies
• External Asset Managers / External Financial Consultants
• USA
• Additional Disclaimer relevant to Credit Suisse Wealth Management

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