notices - See details
Notices
GT
Gaurang Trivedi (not verified)
24th July 2021 | 3:54am

Tendency is a behavioral aspect. Current absolute level of interest rate is abnormally low compared to historical levels. As such some inflation in the pipeline should not have material impact on investor psychology. However due to "anchoring" (where low inflation and resultant interest rate level become the norm) any perceived increase is immediately and adversely reflected in investor psychology and decision making. Anchoring makes absolute level a relative concept.