Let’s take a look today at just how attractive U.S. interest rates are relative to most of the world. To wit, the title of this week’s On My Radar piece, “The Best Looking Dude at the Dance.” Who in their right mind could have imagined that 1.50% would be attractive? We’ll look at the comparisons today and consider the implications. Lower for longer? Dr. A. Gary Shilling says yes. I’m getting concerned that too many are now in that camp (yours truly among them).
The bond market seems to have forgotten last Friday’s strong employment report. The worry about “What Would Janet Do” (raise interest rates) has subsided. The yield on the 10-year Treasury jumped from 1.49% to 1.58% back down to 1.50%. What is this telling us? One thing that’s apparent to me is that the global capital flow advantage goes to the U.S.