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Long and short term interest rate interaction

Category: Intermarket analysis | 29 Jul 2011 | No comments »

Greetings, let’s talk about interaction between long term and short term interest rates. Bond yields depend on market participant predictions (but not the only!) of inflation. Therefore we can expect that basis interest rates, which react at inflation processes in economy, more influence short term rates and less long term. Factors which have an impact onto the yields were discussed in the article “yield curve”. (more…)

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