Tag: interest rates

De Fault of the Government

Apologies for the bad pun above, but there’s a lot of talk about default, and the uncertainty has made investors sell off short-term Treasuries. From this week’s Wall Street Journal: Banks are dumping short-term government debt, usually one of the…

Deflating

Narayana Kocherlakota, the Minneapolis Fed President, gave a speech on August 17th in which he said: But over the long run, money is, as we economists like to say, neutral…. [I]f the FOMC maintains the fed funds rate at its…

Bonds, Bonds, and Bonds

The bond market is booming, with investors (some say) diving into safe securities, driving bond prices up and yields down. In addition, the Fed has kept interest rates low for one of the longest periods in history. As a consequence,…