The Fed’s aggressive rate-cutting cycle in late 2022, totaling 100 basis points, triggered an unusual rise in long-term bond yields, with the 10-year yield increasing over 1% despite rate cuts.
China’s bond market signals a weak economy, with yields at all-time lows indicating a severe recession and the lowest growth in 50 years outside of major events.
Germany’s economy struggles due to high labor costs and loss of cheap Russian energy, making its manufacturing base uncompetitive, exacerbated by ECB’s high interest rates.
The Fed’s 2% inflation target is challenging, with inflation remaining above 3% for 45 months, the longest stretch since 1980, potentially leading to a target revision in the 2025 framework review.
The Federal Reserve lacks a working theory of inflation, with various theories showing zero correlation with actual inflation, according to former Fed Governor Dan Trillo.
Remote work and changing preferences post-pandemic have led to persistent 3% inflation, fundamentally altering the economy according to Jim Bianco.
The 60/40 portfolio of stocks and bonds faces increased volatility due to the surge in long-term bond yields, with the proper mix depending on individual risk tolerance and time horizon.
Higher interest rates increase interest-bearing income for savers more than depressing borrowing, but the impact diminishes as pandemic-era low-rate loans are refinanced.
The US economy has outperformed other major economies in 2022-2023 due to its innovative and flexible nature, particularly in artificial intelligence and Silicon Valley.
Tariffs can severely impact the economy, potentially causing recession, especially if retaliatory measures lead to trade deficits and disruption.
The bottom half of income earners are disproportionately affected by 3% inflation compared to the top half, who benefit from well-performing assets like homes and stocks.
The mortgage market is trapped, with 3% refinanced mortgages preventing moves to higher-cost homes, while corporate bonds and US government debt face higher refinancing costs.
The Austrian School of Economics, based on 150 years of research, uses economic theory to understand human behavior and study how markets work better than government.
Government’s manipulation of economic statistics like inflation and unemployment is a form of gaslighting to make people believe a more favorable reality for politicians.
California’s infrastructure failures during crises like wildfires exemplify governmental failure at every level, as detailed in Tom DiLorenzo’s article “California Bad Dreaming“.
Politicians’ tendency to play Santa Claus with tax dollars, spending on non-essential projects instead of infrastructure, contributes to government inefficiencies.
The Austrian School advocates for limited constitutional government protecting life, liberty, and property, as outlined in Article 1, Section 8 of the US Constitution.
Mises.org attracts over three million annual readers, fostering interest in libertarian principles particularly among youth, with professors introducing students to Mises’ writings.
In 2024, votes fell for every ruling party in advanced countries for the first time since 1900, with parties in power losing an average of 7% in 12 elections.
The biggest swing to populism occurred among young men, who turned out en masse against the established system.
Economy, immigration, and social media are key factors driving anger and the populist shift, with voters rejecting the crisis-ridden system.
Voters are turning against the “crony elite” perceived to have sold them out to “globalist corporations”.
The populist shift predominantly benefited the right (90% of gains), with a small portion going to the radical left.
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