Still sinking sub-zero yields pose a puzzle for policymakers

Reuters/Mike Dolan/10-29-2021

“As inflation expectations mount, long-term ‘real’ bond yields are sinking further below zero, despite G7 central banks turning more hawkish on withdrawing super-easy pandemic settings and sending markets scrambling to price higher interest rates.”

USAGOLD note: Winston Churchill once said of Russia: “It is a riddle, wrapped in a mystery, inside an enigma…” After reading this article, we would say the same about the bond market. And, it seems, it is not just policymakers who are befuddled by the cross signals, but market participants as well. That ultimately makes for a volatile brew.

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