test 1 - Inflation Returns Yield on US Treasury note...

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Inflation Returns Yield on US Treasury note increase from 2.4% to 3.5% - still increasing o Quantitative easing = creating money and buying corporate bonds modifies inflation expectations o Core inflation (less food and energy prices) declined steadily o US CPI increase 5% then sank reflecting collapse in commodity prices 5 categories that make up US CPI: o Food and Beverage o Housing – largest determinant of US CPI Weakness in housing market explains how inflation is subdued despite rapidly rising food/energy prices CPI is likely to jump without an improvement in housing market o Apparel – little effect o Transportation – easy financing and excess manufacturing capacity put a lid on price increases o Medical Care – not much impact on broader inflation measures
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Commercial Banks = largest group of depository institutions Larger, more diversified portfolio, more sources of funds beyond deposits Conduit for monetary policy Involved in much of the payments system and credit allocation
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This note was uploaded on 11/30/2011 for the course FIN 308 taught by Professor Spivey during the Spring '08 term at Clemson.

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test 1 - Inflation Returns Yield on US Treasury note...

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