March 28, 2021

Buttonwood

Buttonwood – The Fed and the bond markets | Finance & economics

JEROME POWELL does not want you to misunderstand him. The Chair of the Federal Reserve knows that communication is a big part of how monetary policy works. Mr Powell speaks plainly. He is not an economist, but that probably helps, because he is less likely to resort to confusing jargon. His messages at the Fed’s press conference on March 17th were admirably clear: no change in the main policy settings; no change in Fed guidance about future shifts in policy; and no real concerns about jumpy government bond markets.

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Buttonwood – Why people are worried about the bond-equity relationship | Finance & economics

MOST PEOPLE have little time for quants. They find the language of quantitative finance far from illuminating. Even fairly numerate people struggle to grasp what comes easily to pointy-headed number-crunchers. Take the idea of correlation, the co-movement of two or more variables. Such relationships vary with the period over which they are measured. The direction can shift. Things quickly become confusing.

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Yet the quant argot is useful when considering perhaps the biggest fear stalking

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