May 19, 2024 The topic for this issue focuses on when and how the bond market lost its predictive power regarding the economy and inflation. This is relevant because the bond market is enormous, and serves as a core asset class for central banks and for investment portfolios. Recently published content: Most Investments are Actually […]
We know this is true because the curve remains inverted, with short-term debt remaining around the FFR, but long-term is below it, when really it should be a bit above and on a slope upward toward the 30 year. Maybe it will eventually sink in. The FOMC started even talking about hiking rates again recently, since inflation failed to cool in recent months.
People fail to understand we are in fiscal dominance rather than monetary dominance now and interest rate increases wont throttle inflation. Interest rate increases can actually create inflation now because that money is printed and paid to bondholders who then use it in the actual economy therefore creating more money chasing the same amount of goods , therefore inflationary. this is like the 40s not the 70s.