Here is what the curvature of the Eurodollars futures market is saying about future rate movements.
In this second graph, we can see that the length of time between now and the expected next rate hike has spiked, but it isn't as long as the length of time that was expected before and during QE3. If the yield curve flattens more, I don't expect things to turn out well. But, maybe there is a chance that positive real economic growth can manage to salvage normalcy. Of course, as always, mortgage expansion would solve all of this much more effectively than marginal rate changes.
(The gaps in the graphs reflect the period where the model was dormant because the curvature of the yield curve at the short end had disappeared.)
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