Central banks’ efforts to keep markets stable may be creating unintended risks. Emergency lending and market backstops have encouraged highly leveraged government bond trades, potentially lowering borrowing costs while increasing financial vulnerabilities that could require further intervention during the next crisis.
Investors are bracing for a bumpier fall stock market due to shifting odds of a Federal Reserve interest-rate increase and other macro challenges.
Wall Street’s hottest momentum trade has reversed sharply, as former winners tumble and heavily shorted stocks surge.
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