Solid PMI Data in the Euro Area Spark a Turnaround in Bond Yields

Yields are higher on strong European PMI data and Asian stocks climb, while the gap between the stock market and the ex. AI real economy keeps widening in the U.S.

Key Takeaways

• The 2% Inflation Target Orthodoxy Needs a Rethink: Central banks are so fixated on a 2% inflation target, for no reason in particular. This was first established four decades ago and is completely arbitrary. If truth be told, 3% CPI inflation has always been the real sweet spot for the economy and capital markets going back through the history books.