Latest / The Federal Reserve Podcast with Fexingo: Interest Rates, FOMC Meetings, and Monetary Policy
Why the Yield Curve Steepening Is Rattling the Fed
The ten-year Treasury yield has surged to 4.68 percent, its highest in months, while inflation expectations are actually falling. Lucas and Luna explain why this disconnect between nominal yields and breakeven rates is sending a warning signal to the Federal Reserve. They break down what rising real yields mean for monetary policy transmission, how Fed governor Kevin Warsh's recent three-phrase vocabulary hints at the central bank's concern, and whether the steepening curve could force the Fed to adjust its balance sheet runoff plans. With the federal funds rate stuck at 3.63…
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