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Do Government Bond Yields Still Matter as an Economic Signal?
A reader asks: Hi Ben, in your opinion do government yields still give any real signal in terms of future growth and inflation or has it been obscured by all the bond buying by the FED? This might be my favorite chart of 2021: chart How is this even possible? It’s actually not the first time this has happened: chart There are different reasons in each instance. Back then the government basically capped rates to pay for war debts. Now there are lots of other variables at play. Investors are starved for safe yield so money continues to flow into bond funds. Demographics play a role here too as the baby boomers are ... (full story)