Economic Rebounds and Fed “Taper Tantrum”
By Blu Putnam, Chief Economist
Erik Norland, Senior Economist
CME Group
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Four Traits of Economic Rebounds
- In an economic rebound, phase transitions might be abrupt.
- Uneven sectoral recovery could set back employment goals.
- A return to pre-pandemic norms might include higher rates.
- Some supply-chain bottlenecks might be easing.
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A Second Fed “Taper Tantrum?”
- Treasury yields for 10Y, 30Y are well below levels during 2010 expansion.
- Inflation expectations have surged, but real inflation holding at 2013 levels.
- Fed’s “taper tantrum’ nearly doubled 10Y yields to over 3% from 1.6%.
- Will Fed scale back asset purchases amid expectations for solid growth?
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