The Puzzle of Higher Interest Rates and Their Impact on the Economy
===============
#aa2634d8 ver:0.27
Despite expectations of a negative impact, higher interest rates have not caused a recession and the economy has remained resilient. The transmission mechanism between monetary policy and the economy appears weaker, with long-term bond yields lower than short-term yields. However, the commercial real estate market and leveraged buyout industry are feeling the effects of higher interest costs. Investors are choosing safer government debt over riskier assets due to elevated interest rates. Some experts suggest that the Federal Reserve may need to change its strategy and opt for rate cuts to combat inflation. The Fed's focus on raising rates may be a miscalculation, failing to consider technological advancements and demographic shifts. The Fed is puzzled by the lack of a stronger impact on the economy and will discuss easy financial conditions at their upcoming meeting. While financial markets have responded well, there are still potential risks and uncertainties. The combination of high interest rates and buoyant economic performance is a puzzle, leading to the question of whether higher rates could actually be stoking the economy. The UK has just exited a mild recession, and the US financial markets continue to thrive despite the extended policy of holding interest rates at 23-year highs. The privatization of risk, government debt-driven growth, and the Federal Reserve's risk balancing have contributed to this success....
#newstr #MonetaryPolicy #InterestRates #EconomicImpact #FinancialMarkets #FederalReserve #Inflation
https://here.news/story/aa2634d8?ver=0.27
Inflation Continues to Impact Bond Markets Despite Volatility /
npub1az…zmx0n
2024-06-12 05:02:54
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npub1azpjdnkx90pqtdpyvnw2ysvz06xy3k9kqnxd59geu535kaavnvesuzmx0nPublished at
2024-06-12 05:02:54Event JSON
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"content": "The Puzzle of Higher Interest Rates and Their Impact on the Economy\n===============\t\n#aa2634d8 ver:0.27\n\nDespite expectations of a negative impact, higher interest rates have not caused a recession and the economy has remained resilient. The transmission mechanism between monetary policy and the economy appears weaker, with long-term bond yields lower than short-term yields. However, the commercial real estate market and leveraged buyout industry are feeling the effects of higher interest costs. Investors are choosing safer government debt over riskier assets due to elevated interest rates. Some experts suggest that the Federal Reserve may need to change its strategy and opt for rate cuts to combat inflation. The Fed's focus on raising rates may be a miscalculation, failing to consider technological advancements and demographic shifts. The Fed is puzzled by the lack of a stronger impact on the economy and will discuss easy financial conditions at their upcoming meeting. While financial markets have responded well, there are still potential risks and uncertainties. The combination of high interest rates and buoyant economic performance is a puzzle, leading to the question of whether higher rates could actually be stoking the economy. The UK has just exited a mild recession, and the US financial markets continue to thrive despite the extended policy of holding interest rates at 23-year highs. The privatization of risk, government debt-driven growth, and the Federal Reserve's risk balancing have contributed to this success....\n\n#newstr #MonetaryPolicy #InterestRates #EconomicImpact #FinancialMarkets #FederalReserve #Inflation \n\n https://here.news/story/aa2634d8?ver=0.27",
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