[lbo-talk] Krugman on interest rate weirdness

[Michael Pollak]

On Mon, 24 Mar 2008, Doug Henwood wrote:

>> I'm not sure I follow this -- the 1 month T-bill is at 0.5% because the 
>> market expects the Fed funds rate to come down 1.75% in the next month?
>
> It's in the calculations - the assumption that the Fed will be pushing 
> short rates down.

I guess my question was: doesn't that seem like a lot more than is likely?

But I guess that's a silly question.  No one says the markets can't be 
wrong.

Michael