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What are you using to draw this conclusion?
by femiagbabiaka 3y ago
What are you using to draw this conclusion?
- JumpCrisscross 3y agoThe yield curve would be one [1]. Markets have materially increased their long-term rate expectations in the last month and year. [1] https://www.bloomberg.com/markets/rates-bonds/government-bonds/us https://www.bloomberg.com/markets/rates-bonds/government-bon...
- femiagbabiaka 3y agoIt seems like a flawed argument -- the yield curve didn't predict rate increases either.
- JumpCrisscross 3y ago> the yield curve didn't predict rate increases either Neither did, by its own admission, the Fed.
- femiagbabiaka 3y agoAgreed. Seems like the only certainty is uncertainty in that case?
- nmhancoc 3y agoEvery prediction has error bars, some error bars are smaller than others. I wouldn’t be so quick to throw my hands up. For example, the yield curve inversion has had quite good predictive ability so far, and it’s predicting a recession. If you buy the fed’s data driven approach, that means its predicting rate decreases. In that case the long term bond market’s prediction is supported more strongly than the fed’s prediction.
- femiagbabiaka 3y agoPretty much agreed. However, I think there's a huge jump between yield curve predicting a recession (very well founded) and yield curve predicting rates will never come down again, or specifically, that they won't go to zero again (not well founded IMO).