Dudley: How My Hard Economic Landing Forecast Went Wrong
First, the economy retains considerable forward momentum.
Second, Although the unemployment rate has risen to 4.2% from a low of 3.4% in 2023, the increase has mainly been driven by rapid growth in the labor force rather than permanent job layoffs.
Third, the Sahm rule may not be as ironclad as historical experience suggests.
Fourth, although monetary policy remains tight by almost anyone’s standard, financial conditions have eased massively over the past year. Stock prices have soared to record highs, bond yields have fallen, and credit spreads have tightened.
A soft landing implies somewhat higher bond yields
As I wrote more than a year ago, fair value for the 10-year Treasury note yield is probably around 4.5%.
Goodbye to the Bull Market for US Treasury Bonds
The paradigm has shifted. Higher yields are back.
22 augusti 2023
https://englundmacro.blogspot.com/2023/08/bill-dudley-strongly-suspects-that-bond.html
This assumes that inflation averages 2.5% over time, r* is 1%, and the term premium — the difference between expected short-term rates and the 10-year Treasury note yield — is 1%.
Bill Dudley Bloomberg 3 oktober 2024
Tillbaka till Wall Street och Stockholm 3 oktober 2024
https://englundmacro.blogspot.com/2024/10/wall-street-och-stockholm-3-oktober-2024.html
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