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The Bond Market Is Sending a Contradictory Signal on Growth
Episode 54 of The Macro Memo tackles a surprising disconnect in the bond market: the yield curve has been steepening sharply this spring, but the steepening is happening for the wrong reasons. Lucas and Luna dissect the divergence between the two-year yield, which is actually falling amid rate-cut expectations, and the ten-year yield, which is climbing on supply fears and term premium repricing. They walk through the specific numbers from the June 15 market data—the two-year at 3.62 percent, the ten-year at 4.49 percent, the thirty-year pushing toward 5 percent—and explain why this pattern…
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