Thursday, July 11, 2013

expectations anyone ? ...brad delong looks at the evidence bond marketeers expect to see a change in the fed's reacxtion function manifest itself ...sometime .....soon?

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"When ten-year expected inflation falls and ten-year real interest rates rise alongside, that is a shift toward monetary contraction--a Federal Reserve that is now expected to respond according to a reaction function with lower tolerance for inflation in the future"