{"id":56090,"date":"2020-12-19T16:15:16","date_gmt":"2020-12-19T21:15:16","guid":{"rendered":"https:\/\/olduvai.ca\/?p=56090"},"modified":"2020-12-19T16:15:16","modified_gmt":"2020-12-19T21:15:16","slug":"the-fed-wrecked-the-worlds-most-important-market","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=56090","title":{"rendered":"The Fed Wrecked the World\u2019s Most Important Market"},"content":{"rendered":"
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The Fed Wrecked the World\u2019s Most Important Market<\/a><\/h3>\n

Do<\/b>\u00a0you wish to know where the economy is heading? The bond market holds the answer, say the veterans.<\/p>\n

The birds of the moment, the flighty birds, flock to the stock market. But the owls nest in the bond market.<\/p>\n

The owls are the wiseacres.<\/p>\n

The Federal Reserve\u2019s hocus-pocus fails to trick them. They know the card is up the sleeve. And they enjoy exposing the fraud.<\/p>\n

New York Times<\/i>\u00a0economics reporter Neil Irwin:<\/p>\n

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Savvy economic analysts have always known the bond market is the place to look for a real sense of where the economy is going, or at least where the smart money thinks it is going.<\/i><\/p>\n<\/blockquote>\n

For example: Is inflation ahead? The bond market will tell you \u2014 Treasury bonds in particular.<\/p>\n

Bonds and Inflation<\/b><\/p>\n

Longer-dated Treasury notes will telegraph the signal. If they wire an inflationary message, their prices will fall. And their yields will rise.<\/p>\n

(Bonds operate as seesaws operate. When prices go up, yields go down. When yields go up, prices go down).<\/p>\n

Yields would rise because inflation would eat into the bond\u2019s value\u2026 as the termite eats into wood. Under inflation a bond is a sawdust asset.<\/p>\n

Bond purchasers would demand a higher yield to compensate them for inflation\u2019s ravages.<\/p>\n

That is, they would demand insurance against the termite\u2019s evils.<\/p>\n

The Message of the Bond Market<\/b><\/p>\n

Does today\u2019s bond market indicate inflation is ahead?<\/p>\n

It does not. 10-year Treasury notes presently yield under 1% \u2014 0.923%.<\/p>\n

These are historic lows. 10-year yields average 4.40% across time.<\/p>\n

In brief\u2026 the bond market indicates no inflationary menace. Inflation is as tame as a tabby.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Fed Wrecked the World\u2019s Most Important Market Do\u00a0you wish to know where the economy is heading? The bond market holds the answer, say the veterans. The birds of the moment, the flighty birds, flock to the stock market. But the owls nest in the bond market. The owls are the wiseacres. The Federal Reserve\u2019s […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5185,15378,122,11023,303,3650],"class_list":["post-56090","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bond-market","tag-brian-maher","tag-central-bank","tag-daily-reckoning","tag-fed","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/56090","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=56090"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/56090\/revisions"}],"predecessor-version":[{"id":56091,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/56090\/revisions\/56091"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=56090"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=56090"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=56090"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}