The Yield Divide: A Test of Economic Optimism The recent surge in long term bond yields has exposed a widening chasm between Federal Reserve policymakers and Wall Street over the drivers of this historic run up.
Fed officials believe that the strong US economy is fueling higher rates, while traders are sounding the alarm on inflation, energy prices, and government debt.
At its core, this debate revolves around the role of economic fundamentals versus external shocks in shaping long term interest rates.