ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Thus, Spoke the Bond Market

Thus, Spoke the Bond Market

Would market volatility amidst global trade tensions and uncertainty cause a global recession? Although the world’s major central banks had managed to avoid risks in the first week of June, despite some small variations at some maturities, the United States yield curve remained more or less as it was at the beginning. What will happen in the not-so-distant future?

The titles of a few recent articles give some idea about what has been going on in the bond market lately: “The Bond Market Is Giving Ominous Warnings about the Global Economy” (Irwin 2019), “History Tells Us Why the Fed Should Take the Inverted Yield Curve Seriously” (Coppola 2019), “Donald Trump’s Beautiful Economy is Now on Full Recession Alert” (Evans-Pritchard 2019), and “Investors Could Tip the US Economy against Themselves: There’s Risk for a Self-fulfilling Cycle of Market Instability and Economic Disruptions” (El-Erian 2019).

It is likely that Friday, 31 May 2019 will be considered to be one of the milestones of the ongoing global financial crisis that started in the summer of 2007. It is because, in a sequence of two tweets on Twitter, President of the United States (US) Donald Trump declared that 5% tariffs would be imposed on all goods coming into the US from Mexico, until the time the inflow of illegal Mexican migrants stopped. This, as the ongoing US–China trade war that started early in 2018 had already escalated in May 2019.

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Updated On : 18th Jun, 2019

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