Risk of hitting ZLB in next three years is low – San Francisco Fed paper


The risk of returning to the zero lower bound over the next three years should not be a concern for monetary policy, a researcher from the Federal Reserve Bank of San Francisco says.

In an economic letter, Jens Christensen examines the risk of US short-term rates being constrained by the zero lower bound using Treasury yield curve data from 1987 to 2019. He projects 10,000 possible paths for the yield curve up to 10 years ahead.

Christensen predicts short-term rates will continue upwards in

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