What we’re reading (5/2)
“10-Year Treasury Yield Hits 3% For First Time Since 2018” (Wall Street Journal). “The yield on the benchmark 10-year Treasury note, which rises when bond prices fall, surged at the start of U.S. trading and reached as high as 3.008% in the afternoon, as traders braced for the outcome of this week’s Federal Reserve meeting. It then slipped below 3% to settle at 2.995%, according to Tradeweb, up from 2.885% Friday.”
“US Stocks Reverse Course To Close Higher Even As 10-year Treasury Hits 3% And Fed Rate Hike Looms” (Insider). “The S&P 500 led stocks lower for much of the day, falling as much as 1% before investors began to buy the dip and push the broader market higher near the end of the day. The Nasdaq finished up by nearly 2%.”
“What's Driving The Historic Bear Market For Bonds?” (Morningstar). “The culprits are the usual suspects when bond prices decline. It’s the surge in inflation and the Federal Reserve’s moves to raise interest rates which are to blame. The central bank will be front and center this week when its policy-setting Federal Open Market Committee meets for the first time since it raised rates in March. The Fed is expected to raise interest rates by another half a percent Wednesday, which would be the first rate hike of that magnitude in 22 years.”
“Has Inflation Reached A Peak? Three Signs That Prices Could Soon Come Down” (CNN Business). “During the stagflation of the 1970s, both sticky and flexible inflation grew. But so far sticky inflation has remained relatively flat compared with flexible inflation, a good sign that this could still be temporary.”
“Measuring Knowledge” (James Heckman and Jin Zhou, NBER). “We examine if conventional, broadly-defined measures of skill are the same across people who are comparable on detailed knowledge measures. We reject the hypothesis of aggregate scale invariance and call into question the uncritical use of test scores in research on education and on skill formation. We compare different measures of skill and ability and reject the hypothesis of valid aggregate measures of skill.”
