Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
Why Central Banks Are Watching the Yield Curve Slope
Episode 82 of Monetary Policy Explained: Central Banks, Money Supply, and Interest Rates. Lucas and Luna dig into the yield curve slope—the gap between short-term and long-term bond yields—and why it has become a hotter topic than the curve's absolute level. They walk through the mechanics: how a flattening slope can signal tighter financial conditions even when the central bank hasn't moved, and why the slope inversion in 2023-2024 was a false alarm on recession. They also discuss a 2025 paper from the Bank for International Settlements that proposed a 'slope rule' for…
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