Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios Pro Rata

Dive into the world of dealmakers across VC, PE and M&A with Axios Pro Rata. Delivered daily to your inbox by Dan Primack and Kia Kokalitcheva.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Nashville news?

Get a daily digest of the most important stories affecting your hometown with the Axios Nashville newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Columbus news?

Get a daily digest of the most important stories affecting your hometown with the Axios Columbus newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Dallas news?

Get a daily digest of the most important stories affecting your hometown with the Axios Dallas newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Austin news?

Get a daily digest of the most important stories affecting your hometown with the Axios Austin newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Atlanta news?

Get a daily digest of the most important stories affecting your hometown with the Axios Atlanta newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Philadelphia news?

Get a daily digest of the most important stories affecting your hometown with the Axios Philadelphia newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Chicago news?

Get a daily digest of the most important stories affecting your hometown with the Axios Chicago newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top DC news?

Get a daily digest of the most important stories affecting your hometown with the Axios DC newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Federal Reserve governor Lael Brainard at a "Fed Listens" event. Photo: Eric Baradat / AFP via Getty Images.

Even as global growth expectations increase and governments pile on fiscal spending measures central bankers are quietly restarting recession-era bond-buying programs.

Driving the news: Comments Tuesday from Fed governor Lael Brainard suggest the Fed may be jumping onboard the global monetary policy rethink and restarting a program used following the 2008 global financial crisis.

What she said: “I am paying close attention to market developments,” she said. “Some of those moves last week, and the speed of the moves, caught my eye.”

  • Brainard added that she would be "concerned" if she saw disorderly conditions or persistent tightening in financial conditions.

What we're hearing: Economists say it's unlikely the Fed will reignite its quantitative easing program as central banks in Australia and Korea have announced in recent days but could restart Operation Twist.

What it means: Operation Twist III, as it's been dubbed by economists (because it would be the third time the Fed has used the tool), would see the Fed selling some of its short-dated U.S. Treasury bonds and buying longer-dated bonds to flatten the yield curve as it did in 1962 and 2011.

Why it matters: In addition to the technical benefits for the bond market, Operation Twist has historically stimulated the economy by pulling down the benchmark 10-year Treasury yield.

  • Because most consumer interest rates — like credit cards, auto loans, mortgage rates — are set based on the 10-year yield, Operation Twist could act as an accelerant for the economy without the Fed having to add to its balance sheet and risk the appearance of concern.

Under the surface: Despite the extraordinarily bullish expectations for booming economic growth in 2021, rate-sensitive sectors of the economy are showing weakness.

  • The housing market has slowed with recent home sales numbers badly missing expectations and CoreLogic's latest Home Price Insights Report noting that "as supply/demand challenges continue to push home prices higher, we may see new barriers for some prospective buyers in 2021."
  • The rate for the traditional 30-year fixed mortgage saw its largest single-week increase in almost a year last week, rising to 3.23%, according to the Mortgage Bankers Association.
  • Auto sales are slowing after a weak 2020, with Edmunds.com estimating sales fell 2.8% last month, year over year, due to smaller tax returns and higher car prices and interest rates, Stephanie Brinley, principal automotive analyst at IHS Markit, told the Detroit News.
  • Credit card balances and other revolving credit lines fell by 10.8% year over year in December (the last month data were reported) the steepest decline ever, according to the Fed's data.

What's next: All eyes will be on Fed chair Jerome Powell Thursday at a virtual Wall Street Journal event to see if he also is paying close attention to "market developments."

Charted: 5-year inflation expectations hit highest in a decade
Expand chart
Data: St. Louis Fed; Chart: Axios Visuals

In addition to the lightning-fast jump up in nominal U.S. bond yields, the Fed also is likely watching the continued rise in 5-year inflation expectations.

  • While 10-year and 30-year breakeven rates, which measure investors' expectations for inflation over those time horizons, have been capped in recent days as the bond market selloff abated, 5-year breakeven rates have continued to surge higher.
  • The 5-year breakeven rate touched 2.43% on Tuesday, the highest since May 2011.

Got her back: Tuesday's remarks from Brainard were echoed by San Francisco Fed president Mary Daly who told reporters after a speech that the Fed could change the maturity of its bond purchases if the yield curve steepens in a problematic way.

Go deeper

Dion Rabouin, author of Markets
Mar 2, 2021 - Economy & Business

Central bankers continue to battle over rising bond yields

Bank of France governor François Villeroy de Galhau. Photo: ERIC PIERMONT/AFP via Getty Images

Rising bond yields may not be generating much worry from market participants, but central banks have taken notice and are asserting that action must be taken.

Driving the news: European Central Bank governing council member and Bank of France governor François Villeroy de Galhau said the ECB should start by using its pandemic emergency bond-buying program to drive down yields.

Dion Rabouin, author of Markets
Mar 2, 2021 - Economy & Business

Investors increase their exuberance

Illustration: Eniola Odetunde/Axios

U.S. stocks jumped across the board on Monday and the S&P 500 had its best day since June 5, as the bulls stepped in and bought the dips in stock prices following last week's minor selloff.

Why it matters: While some have worried rising U.S. interest rates would dampen investor exuberance over the expected pickup in economic growth thanks to increasing vaccine numbers and big fiscal spending hopes, Monday showed investors still like risk assets. A lot.

Dion Rabouin, author of Markets
Mar 3, 2021 - Economy & Business

Economic sentiment jumps as COVID-19 recedes

Data: Hamilton Place Strategies, CivicScience; Chart: Axios Visuals

Americans' feelings about the economy are turning up, according to the latest confidence survey from Hamilton Place Strategies and CivicScience, provided first to Axios.

What happened: After two months of decreasing, economic sentiment climbed 2.2 points to 49.6, as COVID-19 cases, business restrictions and deaths continued to decline, while restaurant openings and vaccination numbers moved higher.