Finance Question - Working with the Yield Curve
Working with the Yield Curve
Understanding the interaction between the economy, the Federal Reserve, and the yield curve.
Examine the four yield curve charts above.
Research the economic climate, fiscal policy, and Federal Reserve policies during these time periods.
Provide a brief write‐up of how and why those rates are where they are and the shape of the yield curves.
These write‐ups should be very brief, no more than a few sentences for each yield curve.
For example: In 1934 the Federal Reserve had just been established, the country was trying to recover from the Great
Depression. The Federal Reserve failed to recognize a negative rate of inflation therefore the difference
between the real interest rates and nominal. While the Fed thought that interest rates were really low
promoting a recovering economic climate, they were actually sky high.
After examining the previous years’ yield curves spend a more heavily weighted amount of time explaining the
Quantitative Easing programs of the past several years and their effect on the economy and interest rates.
Finally provide your theory what the Fed should do, and provide your theory on what the Fed will actually do.
Substantiate your claims with at least anecdotal evidence.