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Interest rates and Monetary Policy

C/E/472. Relation between term spreads and monetary policy

WORDS:
2950
DATE:
2010
PRICE:
29.99 GBP

The paper examines the impact of monetary policies on the changes in term spread yields. The relationship between short-term and long-term interest rates is discussed arguing whether the term spread can predict output performance irrespective of the information on monetary policy. Economic recessions and inflation levels in the UK since the 1960s are reviewed showing that recessions were preceded by negative term spread.

 

KEYWORDS: monetary policies, terms spread, economic recession, inflation, interest rates,