Gauging Fed Fallout From the Global Bond Rout

The transcript discusses the bond market dynamics and its influence on the Federal Reserve's reaction function. It highlights the Fed's plans for future rate hikes, considering economic data, inflation prospects, and fiscal stimulus from President-elect Trump. The market's role in economic adjustments is examined, particularly in the bond market and yield curve. The discussion also covers real growth, interest rates, and the economic gap. Finally, the impact of the bond rout on Italy's economy is analyzed, focusing on yield movements and economic growth expectations.

What factors are influencing the Fed's reaction function according to the text?

What does the speaker suggest about the Fed's potential actions in the coming years?

How does the bond market impact the financial system as mentioned in the text?

What is the significance of the gap between real growth and the cost of financing?

What are the expectations for inflation and economic growth in the medium term?