The Fed's Long Unwinding Road

Thursday 5th July 2018

Fed Long Unwinding Road

Although the multi-year expansion of the Fed's balance sheet has had a recognised powerful effect on global financial markets, will the reverse process have the same impact?

“Our analysis implies that even if US economic activity holds at current levels and inflation pressures remain subdued, the Fed’s unwinding should trigger a meaningful rise in bond yields"

Dr. Michael Hasenstab

In this edition of Global Macro Shifts, the team examines three factors that have the potential to push bond yields not only higher, but well beyond current market expectations and what this might mean for markets.

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