Rising Economic Uncertainty
Kevin L. Kliesen from the St. Louis Federal Reserve highlights that the increase in economic uncertainty from last spring to this spring is the steepest in nearly 40 years, complicating decision-making for both companies and consumers and potentially leading to recessions. Menzie Chinn from the University of Wisconsin illustrates this uncertainty with the example of potential homebuyers who, despite lower interest rates, may hesitate due to fears of falling home prices. Additionally, the bond market reflects this uncertainty, with government bonds being sold more than purchased, contrasting traditional safe-haven behavior as Treasury yields exceed 4.5%.
