The 10-year Treasury just slid to 2% (and below temporarily) for the first time since November 2016. Why? In our eyes, it has about as much to do with technicals as the painting “Dogs Playing Poker” (by Cassius Marcellus Coolidge).
As US/China relations take a turn for the worse, we are increasingly asked if China might seek to punish the US by liquidating its portfolio of US Treasuries, a course of action often referred to as “The Nuclear Option.”
At a high level, two factors drive economic growth: 1. growth in a labor force (e.g. more people working this year versus last year) 2. growth in productivity (e.g. people producing more this year versus last year). So, the basic formula for growing an economy is people + productivity = economic growth.