Hanno Lustig on Fiscal Dominance, Inflation, and the Effects of Long-term Interest Rate Decline
Macro Musings with David Beckworth
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Is the Fed Casting a Shadow on the Yield Curve?
In 30, 40 years, i see a long o secular decline in real rates across many countries. How much of that decline can be attributed to central banks versus demographics and other things like that? That's a great question, and we don't have a clear answer yet. I just give japans as a dramatic example of what central banks can do. They're looking at the consequences of their actions over the past decade and a half where they've consistently kept interest rates very low. And then there are structural forces such as slow down in growth in most evente economies which has put downward pressure on short-term yields. It's an important ingredient into the monetory policy making process.
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