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Solved Problem: Why Do Bond Prices and Bond Yields Move Inversely?
Supports: Money, Banking, and the Financial System, Chapter 3, and Microeconomics, Chapter 8, Appendix. Image created by ChatGPT A recent article in the Wall Street Journal was titled “A Primer on Why Bond Prices Fall When Yields Rise.” A student reading the title of the article asks, “How can that be right? Investors would prefer…
Unexpectedly Weak September Jobs Report
Image created by ChatGPT This morning (October 2), the Bureau of Labor Statistics (BLS) released its “Employment Situation” report (often called the “jobs report”) for September. The August jobs report had showed an unexpectedly large increase in employment, while the September report shows an unexpectedly small increase in employment. The jobs report has two estimates…
New BEA Data Releases Show Higher Growth and Lower Inflation than Expected
Image created by ChatGPT The Bureau of Economic Analysis (BEA) released two reports this morning (September 30). One report indicated that economic growth was higher in the second quarter of 2026 than the BEA had previously estimated. The other report indicated that inflation as measured by the percentage increase in personal consumption expenditures (PCE) price…
What’s Going on in the Bond Market?
Image created by ChatGPT As the following figure show, as of yesterday, the yield on the 30-year U.S. Treasury bond is the highest it’s been since 2004, before the Global Financial Crisis. The following figure (created by ChatGPT using data from this Treasury website) shows that Treasury bonds at all maturities have risen this year.…
As Expected, the FOMC Raises Its Federal Funds Rate Target
Photo from federalreserve.gov Today, the Federal Open Market Committee (FOMC) met expectation by raising its target range for the federal funds rate by 0.25 percentage points (25 basis points) from the range of 3.50 percent to 3.75 percent that had prevailed since December 10 of last year. As of yesterday, trading in the federal funds…
Canadian Prime Minster Mark Carney, Meet Canadian Prime Minister R. B. Bennett
Image created by ChatGPT The United States and Canada have a long history of friendly relations and, famously, share the longest undefended border in the world. Trade in goods and services has also linked the two countries with substantial economic benefits to both. By and large, trade flows reflect each country’s comparative advantage in producing…
No Sign of Cooling Inflation in September CPI Report
Image created by ChatGPT Today’s report from the Bureau of Labor Statistics (BLS) on the consumer price index (CPI) for August was eagerly awaited by economists and policy analysts. As we discuss in Macroeconomics, Chapter 15 (Economics, Chapter 25), monetary policy affects the economy with, in the words of Nobel Laureate Milton Friedman, “long and…
Glenn on a Better Way for the Federal Government to Raise Revenue
Image created by ChatGPT In Microeconomics, Chapter 17, we discuss the tax system, including principles and goals policymakers can use to evaluate tax proposals. In this column, which first appeared on the website of the American Enterprise Institute, Glenn discusses the advantages of the federal government switching to using a cashflow tax, rather than the…
What’s Happened to Male Employment?
Image generated by ChatGPT On this Labor Day, we look at an important issue: In recent years, women have been faring better than men in the job market. The following figure shows that, for workers 20 years and older, men still hold more jobs than women do, but the gap has been closing. For example,…
Unexpectedly Strong August Jobs Report
Image created by ChatGPT This morning (September 4), the Bureau of Labor Statistics (BLS) released its “Employment Situation” report (often called the “jobs report”) for August. The report showed an unexpectedly large increase in employment. The jobs report has two estimates of the change in employment during the month: one estimate from the establishment survey, often…
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