Bonds have traded in a very volatile manner this month, with the 10-year Treasury yield rising as high as 2.34 percent and falling as low as 2.06 percent.
This rollercoaster ride is likely to continue, says
New York Times columnist Neil Irwin. And why is that, you ask? "There is less liquidity than there once was," he writes.
Increased bank regulation since the 2008 financial crisis has led U.S. banks to curtail their participation in bond markets.
Meanwhile, central banks are a much bigger holders of bonds than they were in the past, thanks to quantitative easing. But the central banks don't trade frequently, another factor keeping liquidity down.
As for the fundamentals, it's difficult to see anything that will push bond yields much higher soon. The economy is sputtering, with growth totaling only 0.2 percent in the first quarter and the Atlanta Federal Reserve's forecasting model putting second-quarter growth at just 0.7 percent.
Economists don't expect the Fed to raise rates before September and perhaps not until next year.
Elsewhere on the economic front, the prevailing narrative among economists holds that recovery from the Great Recession of 2007-09 has been subpar largely because of the paltry annualized wage gains of about 2 percent since then.
But
Washington Post columnist Robert Samuelson begs to differ. "This isn't a low-wage job recovery," he writes. "Listen to the media and you might think that the only kind of jobs being created are in fast-food restaurants and retail chains." That's just plain wrong, Samuelson says.
"The economy's employment profile — the split between high- and low-paying jobs — hasn't changed much since the recession or, indeed, the turn of the century."
Well-paid jobs account for just less than one-third of total employment, about the same as in 2000 and 2007.
"The weakness in wage growth is not driven by the mix of jobs being created but rather by labor market slack," Elise Gould, senior economist of the liberal Economic Policy Institute, told Samuelson.
His conclusion: "the low-wage job recovery is more myth than reality."
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