Another important reason in recent times has been that excess liquidity in the banking system did not end up being parked at the Reserve Bank’s liquidity mop-up operations which would have kept duration risk minimal.
Through the first six months of this year, the U.S. economy has further extended its remarkable performance: Almost 1¼ million jobs were added to payrolls on net, and gross domestic product apparently expanded at a brisk pace, perhaps near that of the prior three years.