Jackson Hole Annual Meeting Report: Inflation has a greater impact on the market after interest rate hikes

Odaily Odaily reported that a report published at the Jackson Hole Annual Meeting stated that it was only after the Federal Reserve launched a rate hike cycle in 2022 that the bond market became more sensitive to inflation data. This means that the public does not understand the (monetary policy) strategy before the FOMC raised interest rates. "Consistent with the perceived shift in policy responses, event studies show that after rate hikes, the sensitivity of interest rates to unexpected inflation data has increased significantly. The increase in perceived inflation response may help the transmission of monetary policy to the real economy and improve the Fed's inflation-unemployment trade-off," the authors of the paper (Michael Bauer, Carolin Pflueger, and Adi Sunderam) wrote. (Jinshi)