Bond Market Problems Mishkin Chapter 5

Unemployment Rate A very large drop in the unemployment rate would cause interest rates to rise.

Middle Eastern and Asian Central Banks Significant purchases of US credit market instruments by Asian and Middle Eastern central banks will cause interest rates to decline.

Increases in Economic Indicators Large increases in leading, coincident, and lagging indicators that suggest that the economy will experience a strong expansion in the future will cause interest rates to rise.

Crowding Out Large US government deficits will cause interest rates to rise and crowd out private borrowing.