Turning Lemons into Lemonade as 30-Year T-Bond Yield Falls to All-Time Low

Jon Banking, Blogosphere, Economy, Fiscal Policies, Market Commentary

‘I certainly see low bond yields, and I see an environment [where] that’s likely to continue into the future.’
– James Bullard, President, St. Louis Federal Reserve
Back in 2000, only 4.2 million (about 12%) of Americans aged 65 and up were working. Today, about 9 million (18.8%) of older Americans are working – that’s more than at any time since the turn of the century.
Interestingly (or sadly, depending on your view), the trend for the rest of the American population is almost the mirror image. The employment/population ratio of the adult population has not rebounded from the last two recessions.
As of May, the employment/population ratio was 59.9%; that’s below the 62.5% we saw in May 2008 and the 64.5% of May 2000.
Why are so many older Americans working? You could point your finger at several reasons – inadequate savings, the weak economy, and longer life expectancies – but I think one of the biggest reasons is the Federal Reserve’s war on savers.
I’m talking about ZIRP (zero interest rate policy), which has pushed the return on traditional savings vehicles – like bonds and CDs – to almost nothing.

This post was published at Mauldin Economics on JULY 5, 2016.