SF Fed paper on the bond yield 'conundrum'

The Federal Reserve Bank of San Francisco Working Paper "The bond yield 'conundrum' from a macro-finance perspective," published May 2006, documents the extent and timing of the bond yield conundrum using two empirical no-arbitrage macro-finance models of the term structure of interest rates.

In 2004 and 2005, long-term interest rates remained remarkably low despite improving economic conditions and rising short-term interest rates, a situation that former Fed Chairman Alan Greenspan dubbed a

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