Bond yields are falling despite the Fed’s decision to taper QE
- This is because QE has not affected the economy
- Falling bond yields are not bearish for stocks
- 6.0% money growth, the impact of which is further diminished by declining velocity;
- 1.2% inflation, which is 40% below the Fed’s target;
- 3.7% nominal growth, which is inadequate to sustain anything like 4% real growth--which was in fact zero (QtQ) in the first quarter;
- A complete absence of any discussion at the FOMC of taking concrete steps to accelerate money growth.