Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/299080 
Year of Publication: 
2023
Citation: 
[Journal:] Journal of Central Banking Theory and Practice [ISSN:] 2336-9205 [Volume:] 12 [Issue:] 3 [Year:] 2023 [Pages:] 5-22
Publisher: 
Sciendo, Warsaw
Abstract: 
The Covid-19 Pandemic and policy response rattled the USTreasury markets. Conventional US Treasuries, inflation adjustedUS Treasuries, and the relationship between the two developed inways such that ignoring changes in real interest rates yielded dis-torted inflation expectations estimates. Since the beginning of thepandemic, monetary policy kept nominal rates low and close tozero, but positive. Real rates, on the other hand, became increasing-ly negative. The relationship between the two market rates becamenegatively correlated, and distorted because of the fourth round ofquantitative easing, along with the Fed preventing nominal yieldsfrom turning negative. Federal Reserve actions during the Covid-19pandemic drove a larger wedge between nominal interest rates andreal interest rates in the inflation adjusted market.
Subjects: 
US Treasuries
Break Even Rate
Inflation
TIPS
Federal Reserve
JEL: 
E4
E5
G21
G23
G28
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.