Antonio Fatas, Data first, priors second

Antonio says: The fact that long term interest rates is typically seen as the outcome of large purchases of assets by central banks around the world. In fact, many see it as a success of monetary policy actions.  

Here is the USA Ten Year:

The graph starts shortly after the Nixon Shock, our starting point.  After the period of price distortion, the ten year yield began a near linear drop since 1985.  The deviations I see are mostly presidential recession cycles.

Clearly something else is happening, something structural between the central bank and Congress.  

A larger clue

Since the Nixon Shock, the US remained the largest economy by  far, until the late 90s when China grew up, but the US economy is still number two.  So, I have a simple rule. If the economist makes some statement about cause and effect in the global economy, I look to the USA.  If I cannot see the effect in US data, the the economist will certainly have large error bands.