Edward Yardeni, president at Yardeni Research, explains why interest rates at 4% – 5% are “a healthy sign of a healthy economy.”
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Look at the history of interest rates and you’ll find that 5% is on the lower side. The problem is the amount of debt that the US government has. 5% on $40t is almost 40% of tax revenue.
Interest rates are going to climb out of control. Got it.
Yardeni is wearing rose colored glasses.
Before 2008 chaos money markets were paying 5%
Retail sales disagree. So do cpi and ppi that speak for contraction and demand destruction. We will verify how beatiful the economy is in the midterms elections.
The war was over on Day 1??
All these old men and their 20C models have utterly destroyed confidence and credibility after bringing T2 back😮😢Resilience is over for 80% of public and the overabundance of debt to NO benefit for any but rich will bring backlash😢😮
picked up 20 yr treasuries at 5.398%
Warsh isn't lowering rates (but is printing money). Go US Bonds.
After 5 years of above target inflation, we will have another 10 of above average inflation. The economy may not ever have a recession – we will just endure sustained high inflation.
In this segment of Bloomberg Surveillance, Edward Yardeni, President of Yardeni Research, discusses the current state of interest rates and the resilience of the U.S. economy.
Key Takeaways:
Interest Rates: Yardeni argues that the current interest rate environment of 4% to 5% should be viewed as "back to normal" rather than "higher for longer" (0:59–1:15). He believes this range is a healthy sign of a functioning economy where capital is properly allocated (1:16–1:26).
Economic Resilience: Despite widespread fears of a recession earlier in the decade, the economy has proven to be highly resilient, driven by strong consumer behavior and capital spending (0:30–0:47).
Debt Levels: While government debt is objectively higher, Yardeni emphasizes that it must be viewed relative to the size of the economy. He suggests that the public debt burden is manageable and notes that bond market auctions have historically stabilized when yields reach attractive levels around 5% (1:49–2:46).
Recession will NOT happen as long as we print trillions each year… "Economy just fine and debt is fine" is the stupidest thing to say… Inflation is through the roof because we print 7.5% each year