What you're not hearing about the big back-up in Treasury yields

Monday, February 22, 2021
Donald L. Luskin

It's really so simple. Low yields mean panic. Rising yields mean growth.

Update to Strategic View

We've achieved our target for the 10-year Treasury yield at 1.32%. Fears that higher yields will be prohibitive to growth are misplaced. Low yields reflect panic, as they did in 2016 in the aftermath of Brexit. Higher yields reflect growth, as they did in the two years following the Brexit panic. This is proven in the post-war record of 21 yield back-ups, in which the S&P 500 only had a negative total return in 3 cases. Yields will move higher as the current V-shaped recovery becomes a boom.