Your FP/CM Newsletter – 3Q18
FP/CM KNOWLEDGE CORNER – THE YIELD CURVE
AARON COHEN, Ph.D., Partner, President, Portfolio Manager
One of the most important social functions of financial markets is to provide information through the price-discovery mechanism. Negotiated transactions of all kinds between buyers and sellers provide prices, which give businesses, investors and speculators a picture of supply & demand conditions.
Interest rates are prices also, the price-of-money. The price-of-money and its trend gives us an indication of the relative demand for consumption & investment versus savings, in other words, the price that a saver would demand to defer consumption to some point in the future in exchange for a