archived_user
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- Jun 18, 2026
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On page 223, they talk about the ability to hedge recession risk and how its one of the drivers of term premiums.
They say a low term premium warranted if aggregate demand drives inflation and growth. The nominal bonds tend to be negatively correlated with growth in these cases.
What this have to do with ability to hedge recession risk? Maybe tired but don’t see connection.
They say a low term premium warranted if aggregate demand drives inflation and growth. The nominal bonds tend to be negatively correlated with growth in these cases.
What this have to do with ability to hedge recession risk? Maybe tired but don’t see connection.