The yield curve, however, is behaving differently. In 2003-07, the curve flattened as the Federal Reserve raised short-term rates while long-end yields remained subdued—the "Greenspan conundrum." This was later associated with a global savings glut: strong demand for securities held down long-term yields even as policy rates rose. Today, the curve is steepening, suggesting a different supply-demand balance. Rather than excess demand for savings, rising debt issuance is now coming from stronger demand for investment capital, including AI infrastructure, public spending, and defense.The 2003-07 expansion was also supported by globalization, large current-account imbalances, and favorable demographics, including a rising share of people in their prime saving years. Today, globalization is slowing or partly reversing, while population aging is increasing the share of retirees, who are more likely to consume accumulated savings. These shifts may reduce structural demand for long-duration bonds.These are fundamental forces. If governments or central banks try to offset them by holding interest rates below an economically sustainable level, inflation may rise. The market reaction last week—higher inflation swaps and a weaker US dollar—was consistent with that concern, although it does not prove causation. If capital demand is structurally too strong, interventions aimed at lowering long-end yields may need to be very large. With labor and commodity supply constrained, the likely consequence would be greater inflation pressure rather than a durable reduction in borrowing costs.