Argonautica

In 1918, the Ford Model T, accounted for over half of all cars sold. Through efficient assembly line production Ford disrupted the automobile industry by drastically reducing manufacturing costs to achieve a market share not previously seen and still to be surpassed. It took until 1972 for the VW Beetle to reach the Model T’s 1925 previous record of 2m vehicles sold in a calendar year.

There is increasing scepticism in the bond market that the Federal Reserve will be able to suppress medium to longer-term market interest rates. If investors cannot be persuaded that the likely record robust growth we are about to witness is “transitory” then Chairman Powell will at some point face a choice: lose credibility through tapering asset purchases and raising short rates earlier than previously guided (potentially killing the recovery); or increasing (or threatening to increase) asset purchases of Treasuries to re-establish control over the yield curve.