The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Bond Outlook February 7th

None of the longstanding problems of the US economy have been properly addressed, so we are beginning to doubt our own optimism of recent weeks. What a challenge for Bernanke!

Bond Outlook [by bridport & cie, February 7th 2007]

Over the last weeks, optimism about the US economy has reigned, not least in this Weekly comment. Lower oil prices (compared with last year, and notwithstanding the recent rally) have allowed consumer spending to continue unabated in the USA. The beginning of a shift in relative return back to labour from capital has raised hope that households will feel little or no squeeze as the housing market slows. A fortnight ago we observed that the question about the US economy's landing being soft or hard was misplaced; there was going to be no landing at all!


Yet there has to be a landing sometime. The unsustainable -- in this case a country and the households in it living beyond their means -- has eventually to be brought to account. To continue the aircraft metaphor: the plane was gently approaching the runway when the pilot pulled back the joystick, opened wide the throttle and flew off again. Now the co-pilot, in the person of Ben Bernanke, has to wrestle with the pilot to circle round again and really land, before the fuel runs out, and preferably softly.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree