In late June the Fed lowered its federal funds rate target from 1.25% to 1%. However between mid June and early August the yield on longer term 10 year Treasury notes rose from 3.1% to over 4.3%. This shows that Federal Reserve activity is irrelevant to the behavior of long term interest rates"
Agree or Disagree with the underlined portion of the above quote and explain your reasoning clearly. (If you agree, explain why Fed activity has no influence on long term rates...if you disagree, explain why longer term yields actually increased following the decline in the federal funds rate and what the increased difference between long term and short term rates signifies about investor expectations.)© BrainMass Inc. brainmass.com October 24, 2018, 5:43 pm ad1c9bdddf
Federal funds rate target
<br>I disagree. Normally a low rate of Fed funds will keep the longer term 10 year Treasury rate to be also low. ...
Federal Reserve activity is emphasized.
Describe the Federal Reserve's assessment of the current economic activity & markets
Describe the Federal Reserve's assessment of the current economic activity and financial markets.View Full Posting Details