3min snip

Forward Guidance cover image

“Nightmare Scenario” For The Fed | Felix Jauvin

Forward Guidance

NOTE

Is the Federal Reserve Still Capping Long-Term Yields?

The focus on the federal funds rate is misplaced as changes in the quantity of money are more important. The Bank of England has broken tradition by doing quantitative easing on the long end while hiking the short end. The Fed could do similar operations on the long end but still have the Fed funds rate stay at 5%. This could cause confusion among the masses who wouldn't pay as much attention.

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