Inflation Angst Drives US Long-Dated Bond to 2007 High
Tom and Paul(Host)•Tom(Host)•Paul(Host)•Joseph Lavorgna(Guest, Chief Economist, SMBC Nikko Securities; Former Chief Economist, National Economic Council)
Executive Summary
12 quotes
Concerns Raised
Persistent inflation driven by supply chain disruptions and geopolitical conflict.
The bond market is underpricing inflation risk, creating potential for a sharp rise in yields.
The Federal Reserve is constrained and may be forced to accept higher inflation or cause a recession.
Lack of political will for fiscal austerity will continue to fuel inflation and debt.
A potential financial system stress event if 10-year Treasury yields rise to the 4.75%-5.00% range.
Opportunities Identified
Long-term disinflationary productivity gains from Artificial Intelligence.
Potential for AI-driven productivity to translate into higher real wages for workers.