Good morning everyone.
The Federal Reserve policy meeting scheduled for this week is poised to be the most complicated one in several years. Surprisingly, the current state of the economy is not the main issue at hand.
The true challenge comes from an abrupt change in rate-hike expectations, which has been sparked by a recent spike in yields. This jump in yields is not really driven by the Federal Reserve. Instead, it is the direct result of a growing ex-ante imbalance between the available supply of bonds and the overall demand for bond financing.
#economy #markets #federalreserve
The Federal Reserve policy meeting scheduled for this week is poised to be the most complicated one in several years. Surprisingly, the current state of the economy is not the main issue at hand.
The true challenge comes from an abrupt change in rate-hike expectations, which has been sparked by a recent spike in yields. This jump in yields is not really driven by the Federal Reserve. Instead, it is the direct result of a growing ex-ante imbalance between the available supply of bonds and the overall demand for bond financing.
#economy #markets #federalreserve