High Stakes in the Bond Market: The Uncertainty of the Neutral Rate

Reported 2 days ago

On Wall Street, predictions about the neutral rate, which is crucial for setting benchmark interest rates that neither boost nor inhibit the economy, vary widely, causing volatility in the bond market. Experts are struggling to pinpoint its exact level, leading to uncertainty about the Federal Reserve's easing cycle and resulting in wild fluctuations in bond yields. Investors are divided, with some adopting cautious strategies and others making bold calls despite the unpredictable economic landscape due to inflation and policy changes.

Source: YAHOO

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