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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?


To: ggersh who wrote (88028)10/27/2007 1:16:10 PM
From: KyrosL  Respond to of 110194
 
It's true that the long bond rate falls in a recession. But that's because a recession in general pushes down inflation. So, it's still inflation expectations that influence the rate.

In the early eighties, the long bond rate soared even though we went through two consecutive deep recessions. That's because there was double digit inflation at the time.