Feldstein: Bond Vigilantes Are Finally Showing Themselves

Feldstein: Bond Vigilantes Are Finally Showing Themselves

Assessment

Interactive Video

Business

University

Hard

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The video discusses the emergence of bond vigilantes and their impact on interest rates, highlighting the unsustainably low long-term rates due to monetary policy. It anticipates a normalization of these rates and examines the Fed's influence on the bond curve. The discussion shifts to the potential market impact of price declines, noting that some investors may not be affected due to their investment strategies.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the primary reason for the unsustainably low long-term interest rates mentioned in the video?

Increased consumer spending

Global economic slowdown

High inflation rates

Monetary policy

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What part of the bond curve is referred to as the 'belly'?

20 to 30 years

7 to 10 years

3 to 5 years

1 to 3 years

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How has the Federal Reserve influenced long-term interest rates?

By buying billions of dollars of long-term bonds

By reducing inflation

By increasing short-term rates

By selling short-term bonds

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What shift in analysis is discussed in the context of bond market changes?

From market analysis to risk analysis

From risk analysis to yield analysis

From yield analysis to price analysis

From price analysis to yield analysis

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How might some investors react to price declines in the bond market?

By increasing their bond purchases

By marking their portfolios to market

By selling all their bonds

By welcoming positive yields