Optimal policy and market-based expectations
Financial market prices contain valuable information about investors’ views regarding future interest rates, inflation, and other economic variables. However, such market-based expectations can be hard to interpret because changes in risk and liquidity premiums also affect asset prices. In practice, policymakers should be cautious in relying on the expectations information in market prices.
Year of publication: |
2015
|
---|---|
Authors: | Bauer, Michael Dominic ; Rudebusch, Glenn |
Published in: |
FRBSF Economic Letter. - Federal Reserve Bank of San Francisco. - 2015, 12
|
Publisher: |
Federal Reserve Bank of San Francisco |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Resolving the spanning puzzle in macro-finance term structure models
Bauer, Michael Dominic, (2015)
-
Inflation expectations and the news
Bauer, Michael Dominic, (2014)
-
Financial market outlook for inflation
Bauer, Michael Dominic, (2014)
- More ...