Abby Joseph Cohen Says Many Financial Models Are Broken

The video discusses the return of the risk-free rate and the challenges faced by traditional financial models due to structural changes in the economy, such as shifts in labor force participation and immigration patterns. It highlights the impact of these changes on models like the Phillips Curve. The discussion also covers the unusual period of low interest rates and inflation, and the current focus of the Federal Reserve on ensuring positive real yields, as evidenced by the flat to inverted yield curve, indicating market confidence in Fed policies.

What are some reasons mentioned for the breakdown of many economic models during recent times?

How has the pandemic affected labor force participation according to the text?

What role did immigrants play in the increase of employment in the United States over the prior decade?

What changes in interest rates and inflation were observed over the past 20 to 30 years?

What does the current flat to inverted yield curve suggest about bond investors' beliefs regarding Fed policy?