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Yield Curve Theories And Their Applications Over Time, Michael Richard O'Donnell
Yield Curve Theories And Their Applications Over Time, Michael Richard O'Donnell
Senior Projects Spring 2020
This thesis will analyze three theories that can explain the term structure of interest rates: The Unbiased Expectations Theory, the Duration Premium Theory, and Market Segmentation Theory. The paper will analyze what factors and expectations drive these theories, and how the Federal Reserve has shaped monetary policy within the context of these theories, from Paul A. Volcker to Jerome H. Powell. The paper will also analyze what narratives set out by the Federal Reserve, and their explanations of the yield curve/interest rate behavior through speeches delivered by the Federal Reserve Chairman and other Federal Reserve Governors.
Disruption In The Repo Market - A Sign Of Systemic Issues, Tinatin Bezhanidze
Disruption In The Repo Market - A Sign Of Systemic Issues, Tinatin Bezhanidze
Senior Projects Spring 2020
The Repurchase Agreement (repo) market is an essential part of the financial system. Thus, a disruption in the repo market in September of 2019, leading to the first Federal Reserve intervention since the Global Financial Crisis, sowed panic. This paper discusses some of the possible explanations of the repo crisis, such as tax payments draining liquidity at the same time as the Treasury bonds were settled, changes in regulations leading to inability to use the reserves on the market, a problem of market domination and change in behavior of the non-bank participants. It builds on the theories of the economist …