Should the Fed be next to implement yield curve control?
In March, the Reserve Bank of Australia became the second major central bank to target longer-term interest rates as part of its monetary policy. The move follows that by the Bank of Japan in September 2016, which introduced yield curve control (YCC) – fixing short- and long-term interest rates – to transform the shape of interest rates of assets, specifically government bonds, at differing maturities.
YCC attempts to shape the yield curve to one ‘desired’ by the central bank. The concept seems
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