Why A Spark In The Economy Won't Kindle Inflation

Who's afraid of a little recovery? When the latest employment report showed an increase of 59,000 jobs in May, it was the best piece of economic news in almost a year. Yet the bond market immediately reacted by driving up long-term interest rates above 8.5%, the highest level since November, 1990. The bond market may yet come to its senses. But higher rates could choke off the budding recovery in housing and autos and bring the economy to a shuddering halt.

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