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On “A Forward Strategy for the Inverted Yield Curve”

Q

To what extent are foreign purchases of longer-term treasury securities responsible for the present slope of the curve?

A

James A. Klotz responds:

Although foreign bond purchases are contributing to lower long- term rates (supply and demand), they are not a factor in pushing up short-term rates for which the Federal Reserve is responsible.

Mar 7, 2006

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