If QE1 through QE3 and other unconventional monetary policy (UMP) measures had little impact upon implementation, why did the hint of a stepback induce such large reactions in international markets?
Category Archives: financial markets
The end of low interest rates
The yield on 10-year U.S. Treasury securities averaged 1.8% during 2012, the lowest levels in 60 years. But that episode may now be behind us.
The ECB’s OMT and the German Constitutional Court
The Outright Monetary Transactions (OMT) program undertaken by the ECB has been key in stabilizing sovereign yields in the euro area periphery. Helmut Siekmann and Volker Wieland have evaluated the (German) legal concerns surrounding the program, here.
Revisions in Expected Interest Rate Paths
There’s been a lot of discussion of upward movements in long term interest rates. I thought it useful to consider the revisions in expectations, over time, and in context.
It’s not just the Fed
The yield on 10-year U.S. Treasuries has jumped 50 basis points since the start of May, leading some to speculate that the market is already starting to price in anticipation of an end to the Fed’s bond-buying program. There may be some truth to that, but it’s only part of the story.
Sovereign debt concerns in 2013
Interest rates on government debt for a number of European countries– notably Greece, Portugal, Ireland, Italy, and Spain– shot up considerably during 2010-2012. Those yields have fallen significantly from their peaks, though these five countries still face higher borrowing costs than most other countries in Europe.
George Akerlof on the Response to the Financial Crisis and Great Recession
In a blogpost taking stock of the IMF conference on lessons from the crisis, the Nobel laureate distills the lessons learned.
Crowding Out Watch, Heritage Edition
The Heritage Foundation’s Salim Furth writes:
How Fannie Mae made its profit
Mortgage buyer and insurer Fannie Mae was in the news again this week.
The soaring stock market
Broad market indicators like the S&P500 have been making all-time nominal highs. What’s the significance of that for investors and the economy?