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Good news - the Fed's shift to quantitative tightening might not be as painful as expected
A new study of Federal Reserve policy released Friday has questioned the conventional wisdom that long-term Treasury yields will rise by about 100 basis points due to the Federal Reserve’s plan to shrink its balance sheet. The new study, released at a prestigious gathering of senior Fed officials and Wall Street economists in New York, says the exit from the unconventional monetary policy may not be as “painful” as expected. “Our overall conclusion is that the size of the Fed’s balance sheet is less potent in moving the bond market than as perceived by many,” the experts said. That’s good news for the ... (full story)