Paul Krugman: Market signaling a 'permanent recession'
Nobel Prize-winning economist Paul Krugman outlined Monday just how bleak market sentiment, darkened by fears of the coronavirus and a crash in oil prices, is at the moment.
Pointing specifically to historically low yields on U.S. Treasuries, where investors flee to from the stock market during down times, Krugman said the market is suggesting a "permanent recession."
Per Axios, these low yields mean the U.S. can borrow money now while promising to pay much less than the figures will be worth in the future after inflation. But that's apparently preferable for pessimistic investors who would rather lose some money in Treasuries than a major amount in stocks, even over a 30-year time frame.
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Of course, this doesn't mean an everlasting recession is a real possibility, only that the market outlook is very gloomy and Treasuries are priced very weirdly.
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Tim is a staff writer at The Week and has contributed to Bedford and Bowery and The New York Transatlantic. He is a graduate of Occidental College and NYU's journalism school. Tim enjoys writing about baseball, Europe, and extinct megafauna. He lives in New York City.
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