Edward Conard

Top Ten New York Times Bestselling Author

  • “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
  • “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 full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…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
Upside of Inequality Oxford Unintended Consequences

AI Summary. Long-term government borrowing costs have risen to their highest level in nearly two decades, while inflation-adjusted yields signal that bond markets expect the economy's neutral interest rate to be structurally higher than previously assumed.

Michael MacKenzie and Greg Ritchie Bloomberg
Date Posted:

Following the Fed’s 9–3 vote not to raise the funds rate, the 30-year yield climbed more than 14bps to as high as 5.23%, its highest level since 2007, likely reflecting the market’s concern that the Fed’s reluctance to hike puts it behind the curve.

Are long-term borrowing costs signaling a permanently higher neutral rate?

Core argument: The 30-year Treasury yield surged more than 10 basis points to its highest level since 2007, while the 2-year yield fell 6 basis points to 4.23%, steepening the curve as markets repriced long-term fiscal and rate risk.

The 30-year yield climbed more than 10 basis points to the highest level in 19 years. Yields on two-year notes — which are most sensitive to changes in the Fed’s policy — declined by six basis points to 4.23%, while 10-year yields were up five basis points to 4.66%. The dollar dropped. Interest-rate swaps reflected a roughly 60% probability that officials led by Chairman Kevin Warsh will boost borrowing costs in September after the decision [down from the previous meeting], even as some officials signaled growing conviction that a hike would be needed to control resurgent inflation. A hike is fully priced in for December.

Takeaways by Macro Roundup® AI

  1. The 30-year Treasury yield surged more than 10 basis points to its highest level since 2007, while the 2-year yield fell 6 basis points to 4.23%, steepening the curve as markets repriced long-term fiscal and rate risk.
  2. Rising real Treasury yields signal that bond markets have revised the Fed’s neutral rate higher, tightening effective financial conditions beyond the Fed’s own policy stance.
  3. The 10-year Treasury yield rose 5 basis points to 4.66%, reflecting sustained upward pressure on long-duration debt amid persistent inflation and elevated supply expectations.

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