New rate just dropped: the deserved rate is hereby added to the nominal rate, real rate, effective rate, neutral rate, natural rate
Replies
Good one!
jul 18, 2025, 12:15 pm • 0 0 • view
Is D
jul 18, 2025, 12:27 pm • 5 0 • view
Definitionally, yes.
jul 18, 2025, 12:30 pm • 8 0 • view
Oh my God, it’s insane that I’m saying this, but: that makes perfect sense
jul 18, 2025, 12:33 pm • 7 0 • view
Once you see the deserved rate, you cannot unsee it.
jul 18, 2025, 12:37 pm • 6 0 • view
The idea is five minutes old and I’m beginning to treat it like a real thing. Like: D is the purely political rate. It’s a variable in the lay models that central bankers don’t use, but have to be aware of
jul 18, 2025, 12:40 pm • 8 0 • view
If you stray too far away from the desired rate, you risk not being able to set rates again. And the effect is non-linear, requiring advanced estimation techniques
jul 18, 2025, 12:45 pm • 9 3 • view
banger @usdhuga.bsky.social
jul 18, 2025, 12:57 pm • 1 0 • view
Indeed, we call it a latent variable. It can be estimated using the Kalman filter.
jul 18, 2025, 12:42 pm • 2 0 • view
[Googles “Kalman filter”]
jul 18, 2025, 1:01 pm • 1 0 • view
And I deserve to win tonight's Euromillions. I deserve it, I tells thee.
jul 18, 2025, 12:46 pm • 1 0 • view
from r* to r🤡
jul 18, 2025, 11:42 am • 7 0 • view
Now recalculating target FX rates based on deserved interest parity
jul 18, 2025, 11:39 am • 1 0 • view
If you are receiving a rate above the deserved rate, you are earning an undeserved spread. If you are paying a rate below the deserved rate, you are benefiting from an underserved discount on your funding cost. Thank you for your attention on this matter.
jul 18, 2025, 5:41 pm • 1 0 • view