[Tree] Federal Reserve, FOMC meeting, interest rates, economy, Neutrality, Politics, Monetary Policy, US neutral rate, U.S. fiscal path, US Economy, Interest Rates, Bond Market, Bond ETFs, Inflation, Growth

Version 0.12 (2024-06-24 16:56:50.912000)

updates: The bond market's view of the neutral rate poses a potential roadblock for a bond rally. Higher neutral rate expectations may limit the ability to cut interest rates and cause headwinds for bonds. Forward contracts suggest that the market's view of where US rates might end up is higher than the average over the past decade and above the Fed's estimate. The true level of the neutral rate is subject to debate, with expectations for increased government budget deficits and investment for battling climate change potentially causing an upward shift. The market is pricing in a more elevated floor for yields, potentially limiting how far bonds can run. Most policymakers are moving to the camp of higher neutral rates, but their estimates vary. The uncertainties in making the forecasts underscore the challenges in determining the neutral rate. The performance of financial markets also suggests that the Fed's policy may not be restrictive enough. The S&P 500 has hit records almost daily, even as shorter maturity inflation-adjusted rates have surged nearly 6 percentage points since 2022. The growing view in markets is that the US economy's neutral rate is much higher than what the Federal Reserve is projecting. Investors are currently optimistic and betting that the Fed will start cutting interest rates as soon as September. The bond market's view of a higher neutral rate poses a potential roadblock for a bond rally.

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Version 0.11 (2024-06-24 00:53:43.494000)

updates: Bond markets indicate high US interest rates could last longer than expected

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Version 0.1 (2024-06-23 23:53:36.880000)

updates: The bond market's view of the neutral rate

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Version 0.09 (2024-06-02 10:52:33.501000)

updates: The article questions the assumption of high US interest rates forever

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Version 0.08 (2024-05-29 17:52:27.454000)

updates: Inclusion of expert opinions on the US economy and interest rates

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Version 0.07 (2024-05-24 14:55:50.457000)

updates: Discussion on the impact of the U.S. fiscal path on the neutral rate

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Version 0.06 (2024-05-24 14:52:09.672000)

updates: Federal Reserve member Waller's comments on rising US neutral rate

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Version 0.05 (2024-03-16 21:17:29.133000)

updates: The article discusses the notion of 'Fed neutrality' and reveals the intersections of politics and policy within its operations.

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Version 0.04 (2024-03-15 18:17:58.711000)

updates: The Federal Reserve's view on the neutral rate to be closely watched at the meeting

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Version 0.03 (2024-03-13 22:19:32.541000)

updates: Inclusion of information about the upcoming FOMC meeting and the potential hawkish stance

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Version 0.02 (2024-01-03 06:24:23.459000)

updates: Integration of insights from FT's Listener Mailbag podcast episode

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Version 0.01 (2023-12-11 22:38:58.342000)

updates: Integration of insights from Bloomberg Businessweek's Fed Question Podcast

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Version 0.0 (2023-12-10 13:07:33.320000)

updates: fork

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