The Jackson Hole meeting is expected to drive up US bond yields. In the short term, if Powell fights back against the government's pressure to cut interest rates drastically, the market reaction is likely to be relatively moderate. But what is really worth paying attention to is the greater risk implied by the theme of this conference: “Labor Markets in Transition: Demographic Structure, Productivity, and Macroeconomic Policy.” One is the White House, which is passionate about rapid growth, and the other is an economy limited by production capacity bottlenecks. The irreconcilable conflict between the two is expected to eventually lead to a sharp rise in long-term yields, as the yield curve will adjust for higher inflation risks.

The Jackson Hole meeting is expected to drive up US bond yields. In the short term, if Powell fights back against the government's pressure to cut interest rates drastically, the market reaction is likely to be relatively moderate. But what is really worth paying attention to is the greater risk implied by the theme of this conference: “Labor Markets in Transition: Demographic Structure, Productivity, and Macroeconomic Policy.” One is the White House, which is passionate about rapid growth, and the other is an economy limited by production capacity bottlenecks. The irreconcilable conflict between the two is expected to eventually lead to a sharp rise in long-term yields, as the yield curve will adjust for higher inflation risks.