Policy Tensor

Hawks Take Centerstage

policytensor
Nov 11, 2015
∙ Paid
ACM term risk premia since 2000

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 …

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