Pimco CIO Dan Ivascyn predicts the 10-year Treasury yield could reach 6 per cent if the US economy keeps humming, though yields have already risen from 1.5 to 5.2 per cent over five years. While US stocks hit new highs driven almost entirely by the AI trade, the broader economy tells a different story. Capital Economics' Stephen Brown shows the share of sectors with expanding real value added matches the 20-year average, and employment growth across the BLS's 13 broad sectors also aligns with long-term norms.
A broadening cycle began last year, and a 4 per cent unemployment rate contradicts total dependence on one sector. Consumption remains the primary engine: personal consumption expenditures contributed 2.5 percentage points to Q2 real GDP growth — over 100% of total growth — while real retail sales rose 2.6 per cent in August. Bank of America card data shows 86 per cent of spending categories expanding across all income cohorts.
Some retailer earnings signal consumer weakness, but aggregate data suggests the economy is far less narrow than the stock market.
Source: Financial Times Markets · Summarized by HeadlinesBriefing