, Columnist
Bond Yields Can’t Stay This Low Forever
It might take a while, but normality will return.
Can’t get much lower.
Photographer: Alexander Hassenstein/Getty Images
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See if you can figure out which of these data points conflicts with the others: The U.S. economy grew at an annualized, inflation-adjusted rate of 6.5% last quarter; it added an estimated 850,000 jobs last month; consumer prices have risen 5% over the past year; and the 10-year Treasury note yield has recently fallen to 1.2%.
If you guessed the Treasury note yield, you’re right. Such a low long-term interest rate is totally inconsistent with rapid economic growth, strong job gains and high inflation. What gives?