- "Fed officials have been discussing for several months whether to lower the unemployment threshold as a way to convince markets that they will keep short-term interest rates low for a long time," writes Jon Hilsenrath, joining the chatter begun yesterday by Goldman's Jan Hatzius, who suggests the Fed is set to lower to 6% from 6.5% the unemployment rate threshold at which it would begin hiking the Fed Funds rate.
- Hilsenrath also refers to a recent Fed research paper positing unemployment would fall faster if the central bank promised to keep rates near zero for longer.
- The San Francisco Fed's John Williams is skeptical, telling an audience a lower threshold wouldn't tell anybody anything they don't already know.
- Treasurys (TLT -0.2%) seem to like the idea, the 10-year yield falling 3 bps to 2.64%.
- Long-duration Treasury ETFs: TBT, TLT, TMV, TBF, EDV, TTT, TMF, ZROZ, TLH, SBND, DLBS, VGLT, UBT, TLO, FSA, LBND, TENZ, TYBS, DLBL.
at CNBC.com (Nov 18, 2014)