"Am I wrong to wish that the Federal Reserve had cut short-term interest rates this spring in order to keep the Ten-Year Treasury real rate around +1.5%?"
Yes. You should have wished for the Fed to cut the EFFR in December _because appeared that it was going to be successful in returning PCE inflation to 2%_ [That's what TIPS traders thou…
"Am I wrong to wish that the Federal Reserve had cut short-term interest rates this spring in order to keep the Ten-Year Treasury real rate around +1.5%?"
Yes. You should have wished for the Fed to cut the EFFR in December _because appeared that it was going to be successful in returning PCE inflation to 2%_ [That's what TIPS traders thought] and there have been 5 opportunities since then to raise, lower or leave the EFFR unchanged as new data become available. You should not wish the Fed to target any interest rate.
Is r* supposed to be a long-term rate? I thought it was the shorter policy intervention rate (a synecdoche for the entire vector of policy instruments the Fed might use to raise or lower inflation) that KEEPS inflation _at_ target, not what RETURNS it _to_ target.]
"Am I wrong to wish that the Federal Reserve had cut short-term interest rates this spring in order to keep the Ten-Year Treasury real rate around +1.5%?"
Yes. You should have wished for the Fed to cut the EFFR in December _because appeared that it was going to be successful in returning PCE inflation to 2%_ [That's what TIPS traders thought] and there have been 5 opportunities since then to raise, lower or leave the EFFR unchanged as new data become available. You should not wish the Fed to target any interest rate.
Is r* supposed to be a long-term rate? I thought it was the shorter policy intervention rate (a synecdoche for the entire vector of policy instruments the Fed might use to raise or lower inflation) that KEEPS inflation _at_ target, not what RETURNS it _to_ target.]