Resources
Media Coverage:
Financial Times: “A quality theory of Treasuries”
In testimony to Congress almost exactly 30 years ago, Jay Powell produced a chart. At the time an assistant secretary at the Department of the Treasury, Powell showed that as the federal government had increased bond sales almost every year between 1980 and 1990, the yield on 30-year bonds had continued to drop. That chart still hasn’t changed…
Macro Musings: “Dollar Dominance, Dollar Safety, and the Global Financial Cycle“
Hanno Lustig is a professor of finance at Stanford University, and a senior fellow at the Stanford Institute for Economic Policy Research. Hanno joins David on Macro Musings to discuss his work on dollar safety, safe assets, convenience yields, and more. More specifically, Hanno and David discuss the dollar dominance in global financial markets, how the US’s status as the world’s safe asset provider reinforces its exorbitant privilege in money markets, whether the countercyclical demand for safe assets can help explain why US inflation has been so low this past decade, how years of low interest rate policy might have contributed to the growing wealth gap, and much more.
Related Research:
Can Monetary Policy Create Fiscal Capacity? by Elenev, Landvoigt, Shultz, and Van Nieuwerburgh
The Rest Of the World's Dollar - Weighted Return on U.S. Treasurys by Jiang, Krishnamurthy, and Lustig
Debt Clock: