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Politics : Formerly About Advanced Micro Devices

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longz
To: Tenchusatsu who wrote (1522105)2/12/2025 2:58:43 PM
From: Broken_Clock1 Recommendation   of 1571210
 
"But a bond market freakout over accelerating inflation and a lax Fed – resulting in higher long-term yields that really matter for the economy – would nudge the Fed to switch its bias to rate hikes again. To keep long-term yields from rising too much, the Fed will need to show the bond market that it’s serious about inflation, and that it will crack down again if inflation re-accelerates substantially.

That’s the irony: The Fed might have to hike short-term rates again to make sure long-term interest rates remain “moderate” – paying attention to the third part of its mandate, to conduct monetary policy “so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” The mandate is silent about the Fed’s short-term policy rates. It’s “long-term interest rates” that are in the mandate, and the way to get there is to keep inflation in check."

https://wolfstreet.com/2025/02/11/treasury-markets-inflation-expectations-have-become-unanchored-since-the-rate-cuts/
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