Bloomberg: ‘Dark Matter’ Bond Metric Mesmerizes Wall Street and Washington
https://www.bloomberg.com/news/articles/2023-11-09/-dark-matter-bond-metric-mesmerizes-wall-street-and-washington
It’s the buzz word on Wall Street and in the hallways of the Federal Reserve and Treasury Department. It’s blamed for triggering bond selloffs, shifts in debt auctions and interest-rate policy. That few agree on what exactly it reflects, or how to measure it, seems to matter little — the term premium is a powerful new force in the market.
Typically described as the extra yield investors demand to own longer-term debt instead of rolling over shorter-term securities as they mature, the term premium, in the broadest sense, is seen as protection against unforeseen risks such as inflation and supply-demand shocks, encapsulating everything other than expectations for the path of near-term interest rates.
Certain Uncertainty in the US Bond Market
https://www.project-syndicate.org/commentary/uncertainty-reigns-in-us-treasury-bond-market-by-barry-eichengreen-2023-11
https://www.bloomberg.com/news/articles/2023-11-09/-dark-matter-bond-metric-mesmerizes-wall-street-and-washington
It’s the buzz word on Wall Street and in the hallways of the Federal Reserve and Treasury Department. It’s blamed for triggering bond selloffs, shifts in debt auctions and interest-rate policy. That few agree on what exactly it reflects, or how to measure it, seems to matter little — the term premium is a powerful new force in the market.
Typically described as the extra yield investors demand to own longer-term debt instead of rolling over shorter-term securities as they mature, the term premium, in the broadest sense, is seen as protection against unforeseen risks such as inflation and supply-demand shocks, encapsulating everything other than expectations for the path of near-term interest rates.
Certain Uncertainty in the US Bond Market
https://www.project-syndicate.org/commentary/uncertainty-reigns-in-us-treasury-bond-market-by-barry-eichengreen-2023-11
Bonds vs. Bond Funds: How Higher Rates Are Changing
the Calculation
https://www.wsj.com/finance/investing/bonds-vs-bond-funds-how-higher-rates-are-changing-the-calculation-2dbaf8be
https://www.wsj.com/finance/investing/bonds-vs-bond-funds-how-higher-rates-are-changing-the-calculation-2dbaf8be
Jerome Powell’s Latest Take:
https://www.federalreserve.gov/newsevents/speech/files/powell20231109a.pdf
The prolonged proximity of interest rates to the ELB was at the heart of the monetary policy review and the changes we made to our framework in 2020. We will begin our next five-year review in the latter half of 2024 and announce the results about a year later. Among the questions we will consider is the degree to which the structural features of the economy that led to low interest rates in the pre-pandemic era will persist. With time, we will continue to learn from the experience of the past few years, and what implications it may hold for monetary policy.
https://www.federalreserve.gov/newsevents/speech/files/powell20231109a.pdf
The prolonged proximity of interest rates to the ELB was at the heart of the monetary policy review and the changes we made to our framework in 2020. We will begin our next five-year review in the latter half of 2024 and announce the results about a year later. Among the questions we will consider is the degree to which the structural features of the economy that led to low interest rates in the pre-pandemic era will persist. With time, we will continue to learn from the experience of the past few years, and what implications it may hold for monetary policy.
Monetary Policy Challenges in a Global Economy
https://youtu.be/XRPTYoRrxvQ
Gita Gopinath, Jerome Powell, Ken Rogoff, Amir Yaron, and Pierre-Olivier Gourinchas will discuss the challenges of monetary policy in a global economy
https://youtu.be/XRPTYoRrxvQ
Gita Gopinath, Jerome Powell, Ken Rogoff, Amir Yaron, and Pierre-Olivier Gourinchas will discuss the challenges of monetary policy in a global economy