, Columnist
The Bond Market Can Finally Do Its Job Again
Its behavior is supposed to warn about inflation but the function was smothered by a decade of QE bond buying
Jay be nimble.
Photographer: Graeme Jennings/Washington ExaminerThis article is for subscribers only.
Calm has broken out in the bond market, but the respite is likely to be brief.
It’s a question of when — not if — the 2% bound will be breached on the 10-year U.S. Treasury yield. That’s directly correlated to last week’s revisions to the non-farm payroll series; it shows the pandemic recovery has been both smooth and strong. If growth is more robust, inflation will be, too. This rise in yields is a global trend, forcing central bank thinking to shapeshift.