The Traderszone Network

Published in TZ Latest News 30 May, 2014 by The TZ Newswire Staff

Even The Fed Admits The "Natural" Rate Of Interest Is Lower Than Markets Are Pricing

One of the most important, but difficult to measure, concepts in macroeconomics is the natural or equilibrium real interest rate. This is the rate of interest consistent with full employment and stable inflation. The last few weeks have seen bond yields tumble and a rising cacophony of market participants questioning both the Fed’s central tendency of terminal or natural rates (around 4%) and the market’s perception of how fast we get there.

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