A Tight Money Index for the United States
How tight are monetary conditions?
An excellent proxy of the stance of the monetary authority is the yield on the two year note. As the Fed has hiked at a pace unseen since 1994, the two year yield has responded dramatically. It has risen from essentially 0.0% to 4.5% as of Friday’s closing auction. After so many years of rock-bottom rates, that sure sounds like a lot. How much is it exa…
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