New Study Reveals Impact of Interest Rate Decoupling on Monetary Policy
The study looked at how short-term and long-term interest rates in the US are related. By using a special statistical method, the researchers found that the expectations hypothesis holds true. They also discovered that the gap between short and long-term rates affects how quickly the rates adjust to their normal levels. Over time, this adjustment speed has become more influenced by the maturity gap. These findings can help policymakers understand how interest rates behave and make better decisions.