Edward Conard

Top Ten New York Times Bestselling Author

  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “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 must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “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 offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…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
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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  • 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 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. 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. 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:
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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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  • What Are US Treasury Markets Really Telling Us? Part I — Lusting agrees with Krugman that low CDS prices on Treasurys argue against default panic, but finds them a weak signal. Constructing synthetic Treasuries from…
  • 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.

AI Summary. Long-term interest rates are now driven by inflation data, labor market surprises, Treasury supply, and rising term premium rather than Federal Reserve meeting announcements. This shift occurred because rate hikes were fully priced before each meeting, leaving non-calendar macro data as the primary mover of the 10-year Treasury yield.

Torsten Sløk Apollo
Date Posted:

Between 1989 and 2022, nearly all moves in the 10-year yield came on FOMC days. Its cumulative 400bp rise since August 2022 was due to inter-meeting increases. Fed moves were predictable from data releases, which likely also carried news about the long end.

Are markets pricing long-term rates independent of Fed decisions?

Core argument: The 10-year Treasury yield’s roughly four-percentage-point rise since 2022 occurred almost entirely outside Fed meeting days, marking a structural break from the prior 30-year pattern in which long rates moved almost exclusively on FOMC announcements.

For 30 years, the 10-year Treasury yield fell almost entirely on the handful of days around Fed meetings, and did essentially nothing the rest of the time. That stopped in 2022 after the Fed began to raise interest rates. The 10-year has since risen roughly four percentage points, but almost none of that came on Fed days. The reason is that each hike was largely priced by the time the Committee met, so the FOMC announcement and press conference carried little news for the long end, and the move higher instead came from higher-than-expected CPI prints, stronger payrolls, increasing Treasury supply and a rising term premium, none of which sit on the FOMC calendar.

Takeaways by Macro Roundup® AI

  1. The 10-year Treasury yield’s roughly four-percentage-point rise since 2022 occurred almost entirely outside Fed meeting days, marking a structural break from the prior 30-year pattern in which long rates moved almost exclusively on FOMC announcements.
  2. Hotter-than-expected CPI prints, stronger payrolls, rising Treasury supply, and an increasing term premium now drive long-end rates, displacing the Fed as the primary price-setter for the 10-year.
  3. Because each Fed hike was fully priced before the FOMC met, FOMC announcements carried no incremental information for the long end, rendering the Committee’s calendar largely irrelevant to Treasury market direction.

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AI Summary. 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.

Stephen Miran Financial Times
Date Posted:

Citing a stable term premium, Miran argues the rise in the 10-year Treasury yield most likely reflects investors “marking up their expectations for long-run economic growth, not becoming concerned over central bank or fiscal credibility.”

Are rising bond yields signaling higher future rates or debt concerns?

Core argument: The rise in ten-year real Treasury yields is driven almost entirely by higher expected long-run overnight rates, not by fiscal credibility concerns or debt sustainability fears.

Ten-year real yields are equal to the average expected overnight yield over the next ten years, plus a risk premium that investors demand for locking up their money for ten years. This term premium reflects the fact that realised overnight rates might deviate from expected overnight rates. If the market saw fiscal credibility or debt sustainability problems, this would show up in an increased term premium. But the term premium has also been stable and is only a hair lower since the end of last year. With term premium and inflation expectations contained, the recent increase in bond yields is therefore almost entirely due to higher expected overnight rates over the long term.

Takeaways by Macro Roundup® AI

  1. The rise in ten-year real Treasury yields is driven almost entirely by higher expected long-run overnight rates, not by fiscal credibility concerns or debt sustainability fears.
  2. The term premium on ten-year Treasuries remains stable and only marginally lower since year-end, ruling out market pricing of sovereign fiscal stress as a driver of yield moves.
  3. Contained inflation expectations and a flat term premium together confirm that bond market signals reflect monetary policy rate expectations, not structural deficit risk.

Related Articles:

  • 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.
  • What Are US Treasury Markets Really Telling Us? Part I — Lusting agrees with Krugman that low CDS prices on Treasurys argue against default panic, but finds them a weak signal. Constructing synthetic Treasuries from…
  • 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.