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Volatility Ahead?

The Breakdown

00:00

Fed Guidance

guidance has been used to ease policy, especially when interest rates are pinned at zero. Some say even though the fed was wrong footed by its guidance in june, the tool has been useful on net because it tamped down on large bon market swings. Others think precise steers from powell at all after the last two f o m c meetings about upcoming moves are no longer helpful. Ditching forward guidance insures more volatility in fed's policy making and hence bond markets. That requires higher, not lower, risk premia across asset class.

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