Hawks Take Centerstage

Abstract: The market seems convinced that the Federal Reserve will lift-off in December, 2015. We argue that this expectation needs to be tempered because the economy begs to differ with the hawks. Fatally for the hawks’ case, the Phillips Curve is broken. And since the neutral rate is now exceptionally low and on a downward trend, the Fed's model risk …
Keep reading with a 7-day free trial
Subscribe to Policy Tensor to keep reading this post and get 7 days of free access to the full post archives.