Fed’s forward guidance has significant bond yield impact – DNB paper

The Federal Reserve

The Federal Reserve’s forward guidance has had a significant effect on US government bond yields whilst not harming its own monetary policy credibility„ a working paper published by the Netherlands Bank finds.

In Effects of Fed policy rate forecasts on real yields and inflation expectations at the zero lower bound, Gabriele Galati and Richhild Moessner examine the Fed’s own policy rate forecasts in its Summary of Economic Projections (SEP).

The authors look at what effect surprises in these

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