well, sometimes there are second order effects... The Fed is committing to lower rates to boost the economy... traders say, I think they're going to succeed in boosting the economy...that means some rates should go up! Paradoxically, if people decide that the economy is going to do better, and then they invest and spend more and long rates go up, the Fed thinks 'mission accomplished'.
Neverthless, as a first order approximation I would stand by the notion that buying bonds makes their prices go up, rates go down.
But yeah, if the policy is successful it will steepen the yield curve.
Neverthless, as a first order approximation I would stand by the notion that buying bonds makes their prices go up, rates go down.
But yeah, if the policy is successful it will steepen the yield curve.