Ecognosis Advisory's Freris on Yield Curve, Fed Policy

The video discusses the Federal Reserve's normalization plans and their impact on the yield curve, which can indicate potential recessionary conditions. It explores how banks profit from interest rate changes and the challenges they face with a flat yield curve. The discussion also covers global monetary policy, focusing on the unwinding actions of major central banks like the Fed, ECB, and Japan, highlighting the differences in their approaches and the implications for liquidity and interest rates.

What does a flattening or inverted yield curve typically indicate about the economy?

• Economic expansion

• Recession warning

• Stable growth

• Inflation increase

How do banks typically make money when the yield curve is steep?

• By reducing loan offerings

• By increasing service fees

• By trading the yield curve

• By borrowing at high rates and lending at low rates

What happens to bank profitability when interest rates rise?

• Profitability decreases

• Profitability remains unchanged

• Profitability increases

• Banks stop lending

Which central bank has been unwinding its monetary policy since December 16?

• Bank of England

• Bank of Japan

• European Central Bank

• Federal Reserve

What is the current status of the European Central Bank's monetary policy?

• It has increased interest rates

• It is considering unwinding next year

• It has stopped all liquidity injections

• It has fully unwound