Bond Market Dispels Inflation Alarm as Fed Winds Down QE

As the Federal Reserve winds down its third round of unprecedented stimulus, one thing has become increasingly clear in the bond market: the U.S. economy just isn’t going to grow enough to upend demand for Treasuries.

While more than $3 trillion of debt purchases since 2008 have helped the U.S. recover from its worst recession in seven decades, bond-market indicators for long-term inflation, growth and funding costs are all lower now than they were at the end of the central bank’s first two rounds of quantitative easing.