The chart below depicts the US Treasury yield curve on December 2, 2022 versus the curve in November and June 2022. Please mark the only INCORRECT statement about the properties of a Yield Curve. US Treasury Yield Curve (YTM in %, as of 12/2/2022) 5% 4% 3% 2% 1% 0% 11/2/2022 12/2/2022 2Y 4Y 6Y SY 10Y 12Y 14Y 16Y 18Y 20Y 22Y 24Y 26Y 28Y 30Y Residual Maturity - United States. Dec 2022) ... 1M ago. 6M ago O a. The front end of the curve prices a steep cycle of increases in Fed Funds rate by the FOMC O b. The yield curve presents a deep inversion in the 10-yr versus the 2-yr sector. This usually means that the bond markets expects that the Fed's tightening cycle will lead to a recession, forcing it to cut rates in the future O c. The downward shift in the Yield Curve between November and December suggests that the market is now expecting that the FOMC will not raise Fed Funds rate by as much as it did in November O d. Compared to 6 months ago, the Yield Curve indicates that the bond market now expects that the Fed will not have to raise interest rates by as much as it anticipated in June because inflation Santa
The chart below depicts the US Treasury yield curve on December 2, 2022 versus the curve in November and June 2022. Please mark the only INCORRECT statement about the properties of a Yield Curve. US Treasury Yield Curve (YTM in %, as of 12/2/2022) 5% 4% 3% 2% 1% 0% 11/2/2022 12/2/2022 2Y 4Y 6Y SY 10Y 12Y 14Y 16Y 18Y 20Y 22Y 24Y 26Y 28Y 30Y Residual Maturity - United States. Dec 2022) ... 1M ago. 6M ago O a. The front end of the curve prices a steep cycle of increases in Fed Funds rate by the FOMC O b. The yield curve presents a deep inversion in the 10-yr versus the 2-yr sector. This usually means that the bond markets expects that the Fed's tightening cycle will lead to a recession, forcing it to cut rates in the future O c. The downward shift in the Yield Curve between November and December suggests that the market is now expecting that the FOMC will not raise Fed Funds rate by as much as it did in November O d. Compared to 6 months ago, the Yield Curve indicates that the bond market now expects that the Fed will not have to raise interest rates by as much as it anticipated in June because inflation Santa
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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