In response to this post, a reader asserts:
“[UK] Yield curve has been on a slide since 2010. Nothing to do with Brexit.
Check out global yield curve, looks similar to UK in that it has been on the slide for years as well.
Category Archives: financial markets
Decomposing Changes in Term Spreads around the World
The Real Term Spread and Recessions
There’s an argument being made that because of the zero lower bound, the standard nominal term spread is unlikely to be as accurate a predictor of recessions as it has in the past. A prominent example of this view circulating now is that forwarded by Deutsche Bank’s Dominic Konstam; his analysis indicates a 60% likelihood of recession (WSJ RTE), in contrast to the estimates obtained from the standard model, ranging in the low teens (see for example this post).
Markets post-Brexit
U.S. stock prices fell more than 5% in the two-day aftermath of the British vote to leave the European Union. But equities have since regained those losses and are back near all-time highs.
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Economic consequences of Brexit
Here are my two pence on some of the consequences of Britain’s vote to leave the European Union.
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Guest Contribution: “The Effects of Unconventional and Conventional U.S. Monetary Policy: The Role of Expected Inflation”
Today we are pleased to present a guest contribution by Yi Zhang, Ph.D. candidate at the University of Wisconsin-Madison. This post draws upon this paper.
More on Uncertainty in Open Economy Macro
In my last post, I noted a conference on uncertainty in macroeconomics. Here are two papers of particular interest to me.
“The Impact of Uncertainty Shocks on the Global Economy”
That’s the title of the conference being held today and tomorrow at University College London, and cosponsored by School of Slavonic and East European Studies at UCL, the Banque de France, University of Leicester, the Money, Macro and Finance group, and the Centre for Macroeconomics.
“Spillovers of Conventional and Unconventional Monetary Policy”
That was a title of a conference last summer held by the Swiss National Bank, and noted in this post. Mark A. Wynne and Julieta Yung discuss the conference proceedings.
Expectations of inflation
The FOMC and professional forecasters expect the Fed eventually to achieve its 2% inflation target. The market seems more skeptical.
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