We’ve all seen Ritchie shouting that the efficient markets hypothesis is incorrect.Markets don’t get prices right, politicians with thumb up arse do better.
Which is interesting:
As he notes:
The yield curve [that shows the difference between expectations on long and short-term interest rates], is sending a clear message, however. The fear of a Fed mistake is increasing. The spread of 10-year over 2-year Treasury yields is almost back to a post-crisis low, while the spread of 30- over 2-year yields is indeed now at a post-crisis low: If expectations for interest rate rises for the next two years are growing, but not expectations for longer rates, the implication is that the market thinks that the Fed will indeed deliver rate rises, and go too far — leading to slower growth, and therefore lower yields thereafter.
I agree with him.
He’s using market prices to make his point. From which he must be assuming that market prices encompass all available information – that the efficient markets hypothesis is correct then.