Comment by soVeryTired
6 years ago
> interest rates are a function of expected growth
Again, you're saying that as if it's a matter of fact. When I looked into the relationship between growth and interest rates, I found baffling discussions of demand for money as it relates to a financial system completely unlike the one we use today.
I just find it impossible to separate the nonsense from the useful insight. At some point I just gave up.
It is a matter of fact because interest rates are determined by the Fed...who say: we look at expected growth. Don't make things more difficult than they need to be (you can also see this quantitatively).
Short rates are determined by the Fed. And they target inflation, not growth. The Fed has relatively little control of the yield curve at long maturities.