Why Treasuries Are ‘Risky’ Again | Odd Lots
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We all know that Treasury yields have been surging, alongside bond yields all around the world. So what explains the selloff and does it mean that bonds are becoming fundamentally riskier? What happens if investors can no longer hedge stocks with government debt? And how do expectations of the Federal Reserve's "reaction function" fit in? In this episode, we speak with Carolin Pflueger, associate professor at the University of Chicago and a resident scholar at the Chicago Fed, about her work on the bond market and central banks. We discuss why bonds have become more stock-like, what that means for yields, and the role of the Fed's credibility in making bonds “bond-like” again. Chapters: 00:00:00 - Cold Open 00:02:46 - Guest Introduction: Carolin Pflueger 00:03:20 - Research Overview: Macro Economy and Bond Markets 00:04:16 - The Policy Reaction Function 00:06:07 - Methodology for Measuring Policy Reaction Functions 00:10:10 - Dispersion of Views Among Forecasters 00:12:00 - W
Tags: Carolin Pflueger, Joe Weisenthal, Tracy Alloway
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