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(Video) Bond Yields Surge But Inflation is Missing in Action
The bond market thwarts the Federal Reserve's intent

By Bob Stokes
Fri, 02 Aug 2013 15:00:00 ET
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Fed Chairman Ben Bernanke said in December 2012 that part of the purpose of the Fed's $85 billion monthly bond-purchase program was to keep long-term bond yields low. Yet they have actually been rising. 

One year ago, in July 2012, the yield on 30-year Treasuries fell to a closing low of 2.46%. By July 31, 2013, they had reached 3.75%. The surge in bond yields has been particularly strong since May.
 
And yet inflation is missing in action, and U.S. economic growth remains tepid at 1.7% in the second quarter.
 
In an 11-minute video on bonds, recorded July 19, 2013, EWI's Chief Market Analyst Steve Hochberg provided perspective on the bond market. Watch this 2-minute excerpt as he discusses the surge in bond yields and explains why inflation is missing in action.
 
 
 
You can learn what is really going on with the economy and the bond market by tapping into EWI's wealth of resources. One such resource, a June 6, 2012, Special Report on bonds, told subscribers: "If rates do begin to rise as we expect, most observers will probably be fooled. Bulls on the economy may take the new trend as a sign of economic expansion. Those betting on hyperinflation may take it as a sign that inflation is ready to soar."
 
Now, over a year later, we know that rates not only rose, they skyrocketed. 

Get prepared for what comes next in a financial environment of rising bond yields by reading EWI’s updated Special Bonds Combo Report. It shares some of our most important recent commentary and analysis on bonds, including: 
  • an 11-minute video from EWI Chief Market Analyst Steve Hochberg
  • a brand-new bulletin titled "Three Myths About Rising Bond Yields"
  • our 10-page warning to bondholders published last June 
You can get this report along with two months of EWI’s flagship Financial Forecast Service for the price of one month.
 

 



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