This is the new not-normal normal
A majority of global 60T$ bonds yield near-zero to negative rate
@FT article says "investors blame the Federal Reserve". on.ft.com/39z1lHv
But that is wrong
Zero long-term rate reflects structural imbalances in the global economy ...
A majority of global 60T$ bonds yield near-zero to negative rate
@FT article says "investors blame the Federal Reserve". on.ft.com/39z1lHv
But that is wrong
Zero long-term rate reflects structural imbalances in the global economy ...
these imbalances have been rising over the past decades and reached a tipping point in 2008
The problem only got worse since then and hence the downward pressure on long-term rate continued
The Fed cannot raise long-term, or "natural rate", as it is sometimes called
The problem only got worse since then and hence the downward pressure on long-term rate continued
The Fed cannot raise long-term, or "natural rate", as it is sometimes called
The structural problem has to be solved elsewhere, e.g. rising inequality and high concentration of wealth
This would require serious re-tooling of the economy
The Fed cannot help much here
This would require serious re-tooling of the economy
The Fed cannot help much here
We can think of zero/negative long-term rates as symptom of a serious global economic disease
Central banks cannot cure this disease
For possible causes and cures of the disease, see scholar.harvard.edu/files/straub/f…
Central banks cannot cure this disease
For possible causes and cures of the disease, see scholar.harvard.edu/files/straub/f…
