Tuesday Breakfast Morning Read: Impulse response to 1% increase in policy rate from Bank for International Settlements – BIS. Monetary transmission is stronger in economies where debt is high. A possible explanation for the stronger effects of monetary policy when debt is high is the larger change in the debt service ratio (DSR) following a monetary policy shock. Specifically, a larger shift in the DSR implies a larger shift in the disposable income (that is, the income that remains after servicing debt) of debtors, who typically have a higher marginal propensity to consume than savers. Put differently, there might be a debt service channel of monetary transmission at play that enhances the effectiveness of monetary policy in countries with higher debt levels. Almost all of the items below have been delayed given the growth of new high-yield and weaker bond covenant protection in 2017 and 10/30 year Treasuries refuse to adjust with the increasing rate (which has major implications of future growth prospect of US commercial and residential real estate in terms of valuation and demand; which has been mainly driven by low inventory and slow demographic shifts).
Intersection notepad 