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Bond yields are not good predictors of inflation
President Joseph R. Biden Jr.’s audacious proposal for $1.9 trillion in additional stimulus this year has generated concern among some, including former Treasury Secretary Lawrence H. Summers, that the package may overheat the US economy and cause inflation. Yet the bond market, often a place where such concerns are registered, does not seem worried. Current changes in bond yields suggest only a tiny rise in future inflation. Could the markets be telling us something? […]