The BondEconomics Newsletter

Brian Romanchuk
Discussion of bond market economics
Created 12 Jun 2021
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  • The Perplexing Problem Of Credit In Macro
    01 Jul 2022
    One of the major issues with the internal logic of neoclassical macro is the handling of credit risk. The problem of credit is acute for Dynamic Stochastic General Equilibrium models because they are ...
  • Crypto And The Real Economy
    23 Jun 2022 • 2 2
    The following tweet by Jon Sindreu set off a debate on Twitter, which I got tangentially involved in. This is a subject that I touched on some time ago (I believe), but I think I can succinctly cover ...
  • Treasury Market Pricing
    21 Jun 2022 • 1 0
    The Fed surprise 75 basis point hike last week blew Treasury yields out, with a small reversal at the end of the week. Such a reversal is typical after large moves. In this article, I just want to dis...
  • Fed Panics
    15 Jun 2022 • 3 0
    The Fed revisited some old financial records by hiking by 75 basis points today. This is a signal that they have thrown out whatever remains of the models that suggested that inflation is transitory, ...
  • Hike Until Something Breaks
    13 Jun 2022 • 2 2
    Although neoclassical macroeconomic theory does its utmost to obfuscate matters, monetary policy in practice is straightforward: central bankers react with a lag to economic data, and if they are pani...
  • Disinflation Needed A Lot Smaller Than Early 1980 Case
    07 Jun 2022 • 1 0
    Marijn A. Bolhuis, Judd N. L. Cramer, and Lawrence H. Summers released a NBER working paper “Comparing Past and Present Inflation” (link) which constructs a alternate CPI index that is comparable to t...
  • Canadian Data Roundup
    03 Jun 2022 • 1 0
    The Bank of Canada remains hawkish (by modern standards), and the policy rate is marching higher. Unless there is a surprise slowdown in inflation (or activity), the policy rate is on track to hit 2.5...
  • The Great Borrower/Lender Mismatch(es)
    30 May 2022
    The structure of financial markets is influenced by imbalances between how lenders would like to lend, and borrowers would like to borrow. The economist community often refers to “maturity transformat...
  • How I Learned To Stop Worrying And Love Shadow Banking...
    24 May 2022 • 2 0
    I had an article planned and started, but I got caught up with events. Instead, I just wanted to make a few comments about the dreaded “shadow banking” sector — non-bank finance. I had seen a few arti...
  • TIPS Valuation Commentary
    19 May 2022
    A quick glance at U.S. TIPS (inflation-linked bonds) shows that if we abstract past the thorny question of where inflation will be in the next few years, the market has largely reversed the relatively...
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