In Part II of this three-part series, we continue to explore three main factors that will continue to push Treasury rates lower, possibly near 0% on the long-end of the curve.
In Part I, we covered the inflation vs. deflation debate and argued that deflation was the more immediate risk. First, we covered a variety of the common inflationary arguments and debunked many of the poorly-formed hypotheses before highlighting the output gap as the most reliable variable for long-run inflation analysis.
Part II will cover FX-hedged Treasury yields and show that US yields are