The transmittance of changes of the prime rate to the long end of the yield curve and why it actually does not work

Autori

• Christoph Müller

Parametri

• Economia e affari

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The paper explores the unusual behavior of the yield curve in response to the Federal Reserve's prime rate hikes, particularly the lack of reaction at the long end since June 2004. It critiques traditional interest theories, suggesting they fail to adequately explain this phenomenon. The analysis indicates that contemporary circumstances and market dynamics play a crucial role in understanding the disconnect between short-term rate changes and long-term yield responses, as raised by Fed Chairman Alan Greenspan in February 2005.

Lingua: Inglese

Pubblicato: 2008

(In brossura)