Edward Conard

Top Ten New York Times Bestselling Author

  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
Upside of Inequality Oxford Unintended Consequences

Robin Brooks Robin Brooks Substack
Date Posted:

Brooks argues rising yields in advanced economies this year are driven by market’s “high alert” regarding debt. The highest cumulative rise in yields this year is in high-debt countries, and yields have risen on days with debt-related bad news.

Markets are on high alert, which they wouldn’t be if they weren’t worried about debt. Markets are aggressively differentiating between high- and low-debt countries as global yields rise. The lowest cumulative rise in yields this year (relative to a global average) is in Switzerland, Norway, Sweden, New Zealand and Australia. High-frequency price action tells us exactly what markets think and they’re clearly agitated about deficits and debt. When Japan’s Takaichi said in January that she was done with “excessive” fiscal austerity, long-term yields spiked sharply. In fact, that spike was so big that it caused global contagion, with the NY Fed doing its infamous “rate check” a few days later to keep the Yen from collapsing. Then there's the US Treasury's surprise buyback announcement on August 19, which tanked the Dollar as precious metals rose.

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  • The Coming Great Repression? — Higher public debt is historically associated with lower, not higher, government bond returns, as financial repression forces banks to hold low-yield bonds and cheap reserves, suppressing borrowing costs. This mechanism reduced British public debt by ~91% of GDP in 1945–55, dwarfing the contributions from inflation or budget surpluses.
  • Rising Bond Yields Are Good, Actually — Higher interest rates remain low relative to nominal income and spending growth of ~7% annually, making current rate levels benign rather than restrictive. Elevated rates help reallocate spending away from consumption and housing toward productive investment, or attract foreign capital to fund that shift.

AI Summary. U.S. Treasury yields have surged to multi-decade highs across maturities, with the 30-year yield reaching levels not seen since 2007 and the 10-year approaching 5%. Rising oil prices are driving inflation expectations, pushing markets to price in near-certain Federal Reserve rate hikes within months.

Elizabeth Stanton Bloomberg
Date Posted:

The 10-year Treasury yield rose 9bp to 4.92%, and the 30-year rose to ~5.35%. The increase in yields stoked demand at today’s 30-year auction, which cleared at 5.308%.

Are higher oil prices forcing the Fed to abandon its rate-cut plans?

Core argument: The 30-year Treasury yield reached its highest level since 2007 and the 10-year hit 4.93%, its highest since November 2023, as an oil-driven inflation surge pushed traders to price a Fed rate hike at 70% odds for next week.

Yields on US government debt rose to fresh multiyear highs — stoking demand for an auction of 30-year bonds. Treasury yields rose by five to 12 basis points across maturities, with the 30-year benchmark reaching levels last seen in 2007. The selloff lured investors to a $22 billion auction of 30-year bonds, which drew historically strong demand. The new securities were awarded at 5.308%, nearly three basis points lower than their yield in pre-auction trading just before the bidding deadline, meaning that bidders at higher yield levels missed out. Investor demand was so strong that a record low 2.2% of the sale went to Wall Street dealers. The auction’s 5.308% result was 2.7 basis points lower than the market level going in, the second-biggest negative gap on record in the past five years.

Takeaways by Macro Roundup® AI

  1. The 30-year Treasury yield reached its highest level since 2007 and the 10-year hit 4.93%, its highest since November 2023, as an oil-driven inflation surge pushed traders to price a Fed rate hike at 70% odds for next week.
  2. The $22 billion 30-year bond reopening carried an indicated yield of ~5.35%, exceeding every 30-year auction result back to 2001 and signaling a structural repricing of long-duration U.S. sovereign risk.
  3. The two-year note yield surpassed 4.5% for the first time since 2024, with markets fully pricing a Fed hike by October rather than December, compressing the expected tightening timeline by two months.

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AI Summary. The Current Population Survey systematically understates income receipt, with nearly half of measured variables showing downward bias of 40% or more when benchmarked against administrative tax and program records. Bias is modest for Social Security programs (under 15%) but exceeds 40% for pensions, unemployment insurance, and food stamps.

Bruce Meyer, Nikolas Mittag, Derek Wu, Anthony Tatarka, et al. National Bureau of Economic Research
Date Posted:

CPS reports of receipts in dollar terms are 40–60% below administrative benchmarks for income sources such as SNAP and pensions. Linked records show most of the gap comes from recipients reporting no receipt at all, not underestimating amounts.

Does survey data systematically undercount household income sources?

To directly measure bias in survey estimates, we calculate the difference between the weighted survey estimate and the survey target constructed from published totals [TSE or total survey error], using public-data adjustments for intentional coverage differences for average dollars received and the recipient share of the population across our income sources. Figures 1 and 2 summarize TSE in the CPS from 1984 to 2022, expressed as a share of the survey target for our measures of recipients (seven income sources) and dollars (eight income sources). In levels, TSE is almost always negative for both recipients and dollars (with SSI dollars an exception in recent years), indicating that survey means are systematically biased downward. For nearly half of the variables the bias is 40% or more. Yet, there is substantial heterogeneity across income sources. TSE tends to be more modest for SSA programs (specifically OASDI and OASI, for which the net bias is below 15% for recipients and dollars), while it is much larger for income sources such as pensions, UI, and SNAP (for which the net understatement exceeds 40%).

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AI Summary. The U.S. Treasury tripled its debt buyback program to $6bn in longer-dated securities, but markets sold off anyway, pushing 10-year yields to their highest level since 2023.

Greg Ritchie and Alex Harris Bloomberg
Date Posted:

The 10-year Treasury yield rose to ~4.85%, its highest level since 2023, after the Treasury announced a planned buyback of $6B, less than many market participants had expected, despite being 3x the size of the previous operation.

Does buying back more debt actually reduce market anxiety about deficits?

Core argument: The Treasury’s $6 billion buyback of 10–20-year securities — triple the $2 billion initially signaled — failed to suppress borrowing costs, with the 10-year yield rising 5 basis points to 4.83%, its highest level since 2023.

The US Treasury tripled the initial size of its next buyback of longer-dated government debt, in an announcement that was met with initial disappointment by investors. The Treasury Department said it will buy up to $6 billion of outstanding securities set to mature in the 10- to 20-year sector. It’s the first such operation under an expanded buybacks program that showcases Secretary Scott Bessent’s resolve to stem the recent rise in borrowing costs. The new figure is triple the amount initially communicated to investors of $2 billion. Treasuries extended an earlier decline after the release, with the yield on 10-year notes up about 6 basis points to 4.85% as of 11:35 a.m. in New York — their highest level since 2023.

Takeaways by Macro Roundup® AI

  1. The Treasury’s $6 billion buyback of 10–20-year securities — triple the $2 billion initially signaled — failed to suppress borrowing costs, with the 10-year yield rising 5 basis points to 4.83%, its highest level since 2023.
  2. Investor disappointment with Secretary Bessent’s expanded buyback program indicates that fiscal-trajectory concerns are outpacing the Treasury’s ability to manage long-end yields through open-market operations.

Related Articles:

  • Bessent’s Bond Gains Wiped Out as Treasury Yields Jump Again — A Treasury buyback program that briefly suppressed long-term government borrowing costs has been fully reversed by renewed global bond selling, with 30-year yields back at 5.27% and 10-year yields ~10 basis points higher than before the intervention.
  • America’s Risky Debt: What Markets See That Policymakers Don’t — The safety premium that investors historically paid for US government bonds over equivalent alternatives has compressed toward zero and, at longer maturities, reversed — with global investors now pricing foreign government bonds as safer than US Treasurys.
  • Rising Bond Yields Are Good, Actually — Higher interest rates remain low relative to nominal income and spending growth of ~7% annually, making current rate levels benign rather than restrictive. Elevated rates help reallocate spending away from consumption and housing toward productive investment, or attract foreign capital to fund that shift.

AI Summary. A Treasury buyback program that briefly suppressed long-term government borrowing costs has been fully reversed by renewed global bond selling, with 30-year yields back at 5.27% and 10-year yields ~10 basis points higher than before the intervention.

Greg Ritchie, Cameron Fozi, and Sydney Maki Bloomberg
Date Posted:

The US 10-year yield hit 4.8%, 10bp higher than its level prior to Treasury’s recent buybacks, and the 30-year yield rose to 5.27%, its pre-buyback level.

Does suppressing bond yields through buybacks actually reduce government borrowing costs?

Core argument: The 30-year Treasury yield has returned to 5.27% and the 10-year yield sits ~4.8% — more than 10 bps above pre-intervention levels — fully erasing the gains Bessent’s August 19 buyback expansion briefly secured.

The yields on the longest-dated US government bonds shot back to levels seen just before Scott Bessent shocked markets last month by expanding a buyback program in an effort to halt the rise. The gambit worked briefly, until the selloff that’s been sweeping through global markets pushed the government’s borrowing costs up again. By Tuesday, that drove 30-year Treasury yields to 5.27%, the level seen moments before Bessent announced the move on August 19. The 10-year yield — a crucial benchmark for the cost of all types of loans — is more than 10 basis points higher than it was then, at roughly 4.8%.

Takeaways by Macro Roundup® AI

  1. The 30-year Treasury yield has returned to 5.27% and the 10-year yield sits ~4.8% — more than 10 bps above pre-intervention levels — fully erasing the gains Bessent’s August 19 buyback expansion briefly secured.
  2. The Treasury’s buyback expansion halted the bond selloff only temporarily, demonstrating that demand-side interventions cannot sustainably suppress yields when a broader global fixed-income selloff is driving borrowing costs higher.

Related Articles:

  • Rising Bond Yields Are Good, Actually — Higher interest rates remain low relative to nominal income and spending growth of ~7% annually, making current rate levels benign rather than restrictive. Elevated rates help reallocate spending away from consumption and housing toward productive investment, or attract foreign capital to fund that shift.
  • Bessent Bounce Starts to Emerge in Long Bond Market Metrics — The gap between long-term government bond yields and equivalent swap rates has narrowed to its smallest in months, reflecting increased investor willingness to hold long-dated government debt following expanded buybacks of longer-dated bonds.
  • America’s Risky Debt: What Markets See That Policymakers Don’t — The safety premium that investors historically paid for US government bonds over equivalent alternatives has compressed toward zero and, at longer maturities, reversed — with global investors now pricing foreign government bonds as safer than US Treasurys.

AI Summary. The U.S. 10-year term premium has held flat over the past year and remains below those of Japan and Germany, indicating markets are not pricing in deteriorating U.S. fiscal credibility. Higher long-term rates reflect a shift in Federal Reserve rate expectations toward hikes rather than cuts, not fiscal stress.

Torsten Sløk Apollo
Date Posted:

Citing the sideways movement in a FRBNY measure of the US 10-year term premium over the past year, Sløk suggests that the US fiscal situation is generating less investor concern than that of Germany and Japan, and may be focusing more on FFR hikes.

Are rising long-term rates driven by Fed expectations rather than fiscal concerns?

Core argument: The New York Fed’s 10-year term premium has moved sideways over the past 12 months, indicating that rising long rates reflect shifting Fed rate expectations rather than deteriorating market confidence in U.S. fiscal sustainability.

The New York Fed’s measure of the US 10-year term premium has moved sideways over the past 12 months. On this measure, there has been no deterioration over the past year in how the market prices US fiscal sustainability or Fed credibility. The US term premium currently sits below the term premiums of Japan and Germany. This suggests that the market is less worried about the US fiscal situation compared with the fiscal situation in Germany and Japan. Put differently, the Fed went into 2026 expecting several cuts, and now the FOMC is leaning toward hiking. With this backdrop, it is not surprising that long rates are higher.

Takeaways by Macro Roundup® AI

  1. The New York Fed’s 10-year term premium has moved sideways over the past 12 months, indicating that rising long rates reflect shifting Fed rate expectations rather than deteriorating market confidence in U.S. fiscal sustainability.
  2. The U.S. term premium sits below those of both Japan and Germany, meaning markets price U.S. fiscal risk as lower than that of two of its largest developed-economy peers.
  3. The FOMC shifted from expecting several cuts entering 2026 to leaning toward hikes, directly driving the rise in long-term U.S. interest rates.

Related Articles:

  • America’s Risky Debt: What Markets See That Policymakers Don’t — The safety premium that investors historically paid for US government bonds over equivalent alternatives has compressed toward zero and, at longer maturities, reversed — with global investors now pricing foreign government bonds as safer than US Treasurys.
  • Don’t Draw The Wrong Conclusion From Treasury Yields — Rising long-term bond yields reflect higher expected short-term interest rates over the next decade, not concerns about government debt sustainability, as both inflation expectations and the risk premium for holding long-term bonds have remained stable.
  • What Are U.S. Treasury Markets Really Telling Us? Part II — 54 percentage point yield increase since 2022. The shift reflects reduced Federal Reserve absorption of long-duration debt, forcing private investors to demand greater compensation for interest rate risk.

AI Summary. 54 percentage point yield increase since 2022. The shift reflects reduced Federal Reserve absorption of long-duration debt, forcing private investors to demand greater compensation for interest rate risk.

Hanno Lustig The Two Cents
Date Posted:
Is Database:
Database

Lustig presents a decomposition that attributes 156bp of the 254bp rise in the 10-year yield since March 2022 to an increase in the term premium, which he associates with the additional duration risk borne by investors as the Fed reduced its balance sheet.

Does reduced Fed demand for long-duration debt explain rising Treasury yields?

Core argument: Term premium accounts for 1.56 percentage points — nearly two-thirds — of the 2.54-point rise in the 10-year Treasury yield since March 2022, dwarfing the 98-basis-point contribution from rising expected short rates.

I plot a decomposition of the increase in the 10-year yield into a term premium component and a future short rate component. According to this measure, a big chunk —1.56 pps (or nearly 2/3 rds)— of the 2.54 pps increase in the 10-year yield since March 2022 is actually due to an increase in the term premium. That premium (the red line in the figure) turned negative around 2015, and [when] it bottomed out in 2020, yields (black line) were trading 135 bps below the path of future short rates (blue line). That’s not entirely surprising: The Fed was absorbing a large share of Treasury issuance at the long end of the yield curve —as well as MBS issuance— effectively removing a great deal of interest rate risk from the market.

Takeaways by Macro Roundup® AI

  1. Term premium accounts for 1.56 percentage points — nearly two-thirds — of the 2.54-point rise in the 10-year Treasury yield since March 2022, dwarfing the 98-basis-point contribution from rising expected short rates.
  2. The term premium bottomed at -1.355% in 2020, when Fed absorption of long-end Treasury and MBS issuance stripped duration risk from the market and pushed yields 135 basis points below the expected path of short rates.
  3. The term premium’s steady climb since 2022 signals that investors now demand compensation for bearing interest rate risk rather than paying for the privilege, reversing a multi-year structural distortion created by quantitative easing.

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  • America’s Risky Debt: What Markets See That Policymakers Don’t — The safety premium that investors historically paid for US government bonds over equivalent alternatives has compressed toward zero and, at longer maturities, reversed — with global investors now pricing foreign government bonds as safer than US Treasurys.

AI Summary. The 10-year Treasury yield has risen above 4.75% as higher oil prices reinforce expectations of Federal Reserve rate hikes. The 30-year yield also climbed to near 5.26%, though Treasury buybacks in that sector have kept it below recent multiyear highs.

Elizabeth Stanton Bloomberg
Date Posted:

The US 10-year yield hit 4.75% for the first time since January 2025. The 30-year yield also climbed, rising 5 bps to ~5.26%.

Does higher oil inflation force the Fed to abandon rate cuts?

Core argument: The U.S. 10-year Treasury yield surpassed 4.75%—its highest since January 2025—as rising oil prices reinforced market expectations of further Federal Reserve rate hikes.

The US 10-year yield topped 4.75% for the first time since January 2025 as rising oil prices bolstered expectations that the Federal Reserve will hike interest rates. While 30-year yields also climbed Monday, rising five basis points to near 5.26%, they remained well below their mid-August multiyear highs, having retreated after the Treasury Department said earlier this month it would increase its buybacks of debt in the sector to bolster its market value.

Takeaways by Macro Roundup® AI

  1. The U.S. 10-year Treasury yield surpassed 4.75%—its highest since January 2025—as rising oil prices reinforced market expectations of further Federal Reserve rate hikes.
  2. The 30-year Treasury yield rose five basis points to near 5.26% but remained well below its mid-August multiyear highs, after the Treasury Department expanded long-dated debt buybacks to support market value.

Related Articles:

  • America’s Risky Debt: What Markets See That Policymakers Don’t — The safety premium that investors historically paid for US government bonds over equivalent alternatives has compressed toward zero and, at longer maturities, reversed — with global investors now pricing foreign government bonds as safer than US Treasurys.
  • Let the Bond Market Speak — Treasury intervention in a functioning bond market suppresses the price signal that transmits collective market information to decision makers, removing the mechanism by which orderly volatility performs its intended economic function.
  • Don’t Draw The Wrong Conclusion From Treasury Yields — Rising long-term bond yields reflect higher expected short-term interest rates over the next decade, not concerns about government debt sustainability, as both inflation expectations and the risk premium for holding long-term bonds have remained stable.