Markets are on fire but will they crash and burn?

The “everything rally” in financial markets kicked off in October with a growing conviction that the Federal Reserve Board was on track to achieve the holy grail of central banking, a soft landing for the US economy. Then the Fed poured oil on the flames. The surge in markets started within the bond market where yields, having peaked in mid-October, started tumbling. Wall Street is counting on the “Goldilocks” scenario for the US economy. It may be disappointed. Credit: AP The yield on two-year Treasury notes was 5.22 per cent on October 18. In the lead up to last week’s meeting of the Fed’s Open Market Committee (FOMC), which sets…