Bond Traders Obsessing Over R* Gauge Before Jackson Hole

The video discusses the significance of the R Star, a theoretical interest rate where the economy is neither stimulated nor restricted. It highlights the focus of U.S. Treasury traders on R Star ahead of the Jackson Hole meeting. Investor Calvin Yeo compares R Star to an appendix, seemingly irrelevant until it becomes crucial. The video explores potential market reactions if the Federal Reserve revises R Star, noting that markets have already adjusted rates in anticipation. It concludes with the impact on yields and market volatility, emphasizing the importance of R Star in economic discussions.

How have traders reacted to the current discussions surrounding the R Star?

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What are the expectations for market reactions if the R Star is addressed at Jackson Hole?

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