In a companion CFE blogpost, we acknowledge that the supersized fiscal stimulus enacted earlier this year invites serious angst about accelerating inflation. We make the case that the inflation risks […]
Latest Posts from the Center
View All PostsRight-Sizing Fiscal Stimulus, when you Factor in Wall Street Realities.
Was the recently enacted Biden stimulus package too large? Is it likely to produce an economic boom so large that it does real damage? And is that damage even more […]
Some Simple Term Structure Arithmetic
Robert J. Barbera and Jonathan H. Wright We’ve written two pieces recently on Treasury yields amid the COVID recovery. Wednesday’s release of the Federal Reserve Open Market Committee’s Survey of […]
Not so fast about the bond vigilantes
There is much excited talk in the press these days about the rise in ten-year yields to 1.5 percent and the rise to 2 percent for the breakeven inflation rates expressed when we comparing Treasury nominal and TIPS yields. The bond vigilantes are back! Another Great Inflation around the corner!
Recovery, Expansion, and an Old Normal Yield Curve
In December of 2019, the U.S. unemployment rate stood at 3.6% and prime age labor force participation, at 82.9%, was at an 11 year high. Today, December 2020 jobs figures were released, with unemployment at 6.7% and participation at 81%, both making it clear that today’s economic backdrop is bleak. These data also make clear that engineering an extended period of strong growth is highly justifiable.