Matthew Raskin on Treasury Market Stability, Interest Rates, and the Fed’s Balance Sheet
Macro Musings with David Beckworth
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Understanding Interest Rate Increases and Factors Driving Long-Term Rates
This chapter explores the recent increases in interest rates and the factors behind them, including expectations for short-term interest rates, risk premiums, and long-run neutral policy rates. It discusses the reassessment of the Fed policy cycle and the impact on longer-term yields, as well as the re-pricing of real term premia due to developments in the market. The chapter also examines the relationship between inflation expectations, supply and budget deficits, and the role of the Fed in offsetting inflationary impacts.
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