Bond Traders Are Obsessing Over This Gauge Before Jackson Hole
- Investors debate impact of higher neutral rate for economy
- Powell has said ‘we don’t really know’ neutral-rate level
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An abstract interest-rate metric is dominating discussions across trading desks ahead of the Jackson Hole symposium, with investors wondering if Federal Reserve Chair Jerome Powell will weigh in, and bracing for further declines in US Treasuries if he does.
Fidelity International, Jupiter Asset Management and hedge fund Blue Edge Advisors are among those pondering the implications of whether there has been an increase in the neutral rate, also known as R*.