Download Bond Market Problems - BYU Marriott School

Bond Market Problems
Mishkin Chapter 5
Unemployment Rate
A very large drop in the unemployment
rate would cause interest rates to rise.
Middle Eastern and Asian Central Banks
Significant purchases of US credit market
instruments by Asian and Middle Eastern
central banks will cause interest rates to
decline.
Increases in Economic Indicators
Large increases in leading, coincident, and
lagging indicators that suggest that the
economy will experience a strong expansion
in the future will cause interest rates to rise.
Crowding Out
Large US government deficits will
cause interest rates to rise and crowd
out private borrowing.