“The perceived reaction function that we saw at that time was extremely flat… even in May 2021 a half-percent inflation surprise… the two-year rate didn't move.”
CP
Carolin Pflueger
Odd Lots ·
“After the Fed started to act, that's when… we see that the perceived inflation response really picks up… goes from zero to one.”
Carolin Pflueger and co-authors · Odd Lots · Why Treasuries Are 'Risky' Again
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15:07
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What was described
Identified a ‘Learning From Actions’ channel where the perceived inflation response of the market increased sharply after the Fed began raising rates in 2022
Said nearby on the same subject
“It has $365 billion of cash that's mainly invested in short-term treasuries… the Fed essentially gave Berkshire a billion-dollar raise by raising rates.”
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Said on Motley Fool Hidden Gems Investing
“We ran a regression of the forecasted Fed funds rate onto forecasted inflation and forecasted output relative to potential… on this different data, forward-looking data.”
CP
Carolin Pflueger and co-authors
Odd Lots ·
“I’ve already owned a lot of two-year notes because I don’t think the Fed’s going to be raising rates four times”
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Said on Macro Voices
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