Anyone seeking clarity on current events is confronted with two seemingly irreconcilable pictures. The media portrays a massively costly war against the coronavirus in which victory remains elusive, coupled with the prospect of a disruptive, disputed election. Counting people who not working but collecting Covid-related benefits, unemployment approximates 30 percent. Entire sectors of the economy are shut down. The image reflected by the bond market, however, is an untroubled economy with no hint of impending political upheavals.
Calmness reigns in the market for government securities. Since the beginning of April, the ICE BofA US Treasury Index’s yield has remained within a 0.27- percentage-point range. The range was 0.96 percentage points in the comparable 2019 period.
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