David Rosenberg
With bond yields at stubbornly low levels, US Credit talks to Merrill Lynch’s chief economist for North America about what’s causing this situation, how long it may last and what it will take to kick-start an increase in yields
Since last June, the US central bank has raised short-term interest rates from 1% to 3% but the yield on the 10-year Treasury note has declined by about 80 basis points to just under 4%. Does this suggest that the US economy is showing signs of weakness?
The short answer is yes, although there are a variety of factors driving long-term interest rates at any given point in time. The bond market is sniffing out the prospect of a discernible slowing in real GDP growth in coming quarters. Most
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