Paul Krugman penned a New York Times Op-Ed, "Et Tu, Bernanke?", referencing the famous Shakespeare quote "Et tu, Brute" which is generally used to signal betrayal from someone unexpected. Krugman meant to say that the Fed has betrayed the American economy by moving away from QE too early. And while I take issue with this framing of the situation, I agree wholeheartedly with how Professor Krugman interprets the market reaction to the Fed's telegraphing its QE timetable.
As I write this, the 10-year US government bond is yielding 2.60%, whereas it had been 2.18% on June 18th prior to Bernanke's QE tapering clarification. So clearly, the market reaction to Bernanke's tapering talk has been negative for interest rates in the US - and globally. The question is why? As a reminder, here's what I...
As this site is now reader-supported via Patreon, the remainder of this article is only available to subscribers at a specific patronage level. Articles at patronage levels BRONZE, SILVER, and GOLD are denoted by the categories in blue capital letters above the post. Posts categorized DAILY are available to both SILVER and GOLD patrons.
Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.