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Awash in Liquidity, Part I: Why Interest Rates Are Falling

First published at Minyanville.com http://www.minyanville.com/business-news/the-economy/articles/Awash-in-Liquidity-Part-I-Why/5/27/2014/id/55107 And why, in the short-term, increased market volatility will result. Despite a generally stronger economic outlook for the US economy, interest rates in May moved significantly lower, as if expectations were for an oncoming recession.  This has confounded many macroeconomists.  In this first installment of a two-part series, I will discuss why interest rates are now falling, and why, in the short-term, increased market volatility …Read More

What’s Behind Falling US Interest Rates?

Federal Reserve policy and signals from the ECB have each played a part in the declining US yield curve. After being range-bound between 2.6% and 2.8% for most of 2014, the yield on the 10-year US Treasury broke out of the range last week and, for a brief time, was several basis points below 2.5%. This has confounded most macroeconomists, as a strengthening economy with rising inflation expectations and rising …Read More