WEBINAR: U.S. TREASURY UPDATE
Watch Berkadia’s Beyond Insights Webinar on Conceptualizing the 10-Year Treasury Yield, hosted on October 11, 2023. Hear from Berkadia’s CEO, Justin Wheeler and Chief Market Strategist, David Zervos from Jefferies.
- Federal Reserve Chair Jay Powell is laser focused on bringing down inflation, and is aware that failure to do so will define his legacy as Fed Chair.
- Excessive quantitative easing over the last 15 years has substantially run up the United States balance sheet, which has lessened the effect of the rate hiking cycle.
- The excess stimulus means that despite rate hikes, the effective Federal Funds rate is closer to the neutral rate, and monetary policy is not nearly as restrictive as the headline number would suggest.
- The recent disinflation has come more from the unwind of the Covid supply shock than the effect of Fed rate hikes, and the utilization of the balance sheet is continuing to provide stimulus to the economy.
- In order to reach the Fed’s 2.0% inflation target, monetary policy makers need to be aware that their balance sheet stimulus is undercutting current measurements, and higher for longer will be needed to achieve their mandate.
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