In 2015, Volatility From A Phantom Rate Hike

In 2015, Volatility From A Phantom Rate Hike by Tony Crescenzi, PIMCO

Many investors are familiar with the adage, “they don’t ring a bell,” to warn when it is time to get in or out of an investment. Well, sometimes they do, or so the famed scientist Ivan Pavlov would likely contend. The physiologist trained dogs to salivate at the sound of a bell, having conditioned them to associate the bell with the delivery of food. Pavlov discovered that he didn’t actually have to deliver the food to get the canines to salivate in anticipation.

It is no different in markets, where the anticipation of an event can invoke the same response as the real thing. Market participants seek...