The Sum of Some Fears

By PAUL KRUGMAN

Published: July 27, 2007

Yesterday’s scary ride in the markets wasn’t a full-fledged panic. The interest rate on 10-year U.S. government bonds — a much better indicator than stock prices of what investors think will happen to the economy — fell sharply, but even so, it ended the day higher than its level as recently as mid-May, and well above its levels earlier in the year. This tells us that investors still consider a recession, which would cause the Fed to cut interest rates, fairly unlikely.

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Published in: on July 27, 2007 at 10:52 am  Leave a Comment  

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