What the Bond Market Is Telling Us About the Biden Economy

www.nytimes.com
3 min read
fairly difficult
A recent rise in interest rates hints that a recovery is on the way, but it could also mean harder choices ahead on spending.
What is happening is known as a "steepening of the yield curve," with long-term rates rising as short-term rates hold still. It tends to presage faster economic growth; it is the opposite of a "yield curve inversion," which is known as a harbinger of recessions.

But the flip side is that the moment appears to have passed when bond markets were giving the government an all-clear signal to do whatever was necessary to boost the economy, essentially making endless funding available at extraordinarily low cost. That could have implications for how the Biden administration approaches the rest of its economic agenda.

Treasury Secretary Janet Yellen has emphasized that low interest rates,…
Neil Irwin
Read full article