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Journals / World Journal of Applied Economics / 2020 / Cilt: 6 - Sayı: 2

Can US Wage Increases be Regarded as a Leading Indicator for Bond Rates?

Ekin Ayşe ÖZŞUCA ERENOĞLU
Elif Öznur ACAR
Pages
169–176
Publication Date
2022-11-06
DOI
—
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

For robustness, we also consider the unemployment rate and consumption expenditures as independent variables.

📌 3 Key Takeaways

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Objective & Hypothesis:After the subprime meltdown, the Federal Reserve focused its attention on US non- farm payroll data in order to pave the way for its fund rate hikes.
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Key Findings & Data:As time went by, the Federal Reserve deemed particularly one sub-component of this data, namely the increments on average weekly wage growth as a proxy for in ation and thus a plausible explanation for raising the interest rates.
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Conclusion & Impact:For robustness, we also consider the unemployment rate and consumption expenditures as independent variables.
🔬Design:Research Article
📍Scope:Comprehensive Sample
⚙️Variables:Domain Parameters

Abstract

After the subprime meltdown, the Federal Reserve focused its attention on US non- farm payroll data in order to pave the way for its fund rate hikes. As time went by, the Federal Reserve deemed particularly one sub-component of this data, namely the increments on average weekly wage growth as a proxy for in ation and thus a plausible explanation for raising the interest rates. In that aspect, we decide to elaborate on this issue further and examine whether this implemented strategy indeed had a re ection in the real market. For doing so, we intend to determine whether there is any causality relation in either direction between US average weekly wage increases and 10-year Treasury Bond rates. We utilize the Toda-Yamamoto causality approach and come up with a statistically signicant result between wages and bond rates. For robustness, we also consider the unemployment rate and consumption expenditures as independent variables.

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Cite This Article

ERENOĞLU, E. A. Ö., ACAR, E. Ö. (2022). Can US Wage Increases be Regarded as a Leading Indicator for Bond Rates?. World Journal of Applied Economics, Cilt: 6 - Sayı: 2, 169–176. https://ajindex.com/articles/646431

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References (2)

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