When “Whatever It Takes” Ends

Jon Economy

Via Global Macro Monitor,
On Tuesday, June 27th, Super Mario said this,
‘Deflationary forces have been replaced by reflationary ones.’ – Mario Draghi
And here is how global 10-year bond yields reacted,
The German 10-year Bund yield increased 77 percent – OK, from a low base – and bonds across the world from Canada to Australia to the United States were tattooed.
Change In Fundamentals?
Absolutely not!
Bond yields haven’t been trading on economic fundamentals for several years due to central bank financial represssion via quantitative easing (QE), ZIRP and NIRP. We have been pounding the table on this point,
Lot’s of hand wringing these days about the flattening yield curve. We still maintain our position that the signal from the bond market is significantly distorted due to the global central bank intervention (QE) into the bond markets. See here and here.
Most of what is happening with the U. S. yield curve is technical. – Global Macro Monitor, June 22, 2017

This post was published at Zero Hedge on Jun 30, 2017.