Debate: Why Are Interest Rates Now Declining?
Featuring: Lara Rhame, the Chief U.S. Economist and Managing Director on the Investment Research Team at FS Investments.
Last week, the Federal Reserve lowered the Federal Funds rate by 0.50%. This was the first decrease in rates in over two years, reflecting the start of an “easing” cycle. We explore what major market characteristics the Fed reviews in coming to their decision, and how this decision may affect yields both generally and to the economy as a whole.
Topics Include:
- What is “maximum employment” and why do we aim for a 2% inflation rate?
- The dangers of spiraling inflation or disinflation
- The potential for a normalized curve
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