Brian James says:
June 15 2022 at 10:48 am
Bond markets have been manipulated since the introduction of QE.. so the reversal of QE is bringing some order. Of course long term rates will rise because it makes no sense for medium and long dated bonds to yield circa -7% or so. Cheap money has led to a boom in the money supply. Inflation and the price of goods is a combination of the supply of goods and at a given time the amount of money in circulation and the velocity of that money in circulation. Central banks can no longer print money to solve economic problems and the legacy of that policy over recent years is partly a reason for the inflation we have now. And bringing inflation under control is now an economic priority.Reply
Richard Murphy says:
June 15 2022 at 11:26 am
That is utterly incoherentThe yield on long-dated bonds is about 2.5%
The P³ seems to think that monetary policy should run on nominal yields and rates, not real.
Hmmm….
Hold on, isn’t QE never going to be reversed?
@jgh
It isn’t Thursday yet.
Strange that the ex-guitarist in the Damned would take an interest in Murphy’s blog. Maybe Rat Scabies or Captain Sensible will show up soon
Why wouldn’t price-taking firms buy inflation swaps from price-makers, like central banks?
inflation swaps are impossible to hedge so issuing banks make them very expensive..thats always been the case