Evidence indicates that special factors such as the steepening of the yield curve in the early '90s and the increased availability and liquidity of mutual funds caused the public to redirect part of its savings balances from bank deposits to bond and stock mutual funds from 1990 to 1994. Except...

Empirically, monetary policy affects bond rate components differently in the short run and the long. In the long run, it influences the bond rate mainly by altering the trend rate of inflation. In the short run, however, policy has significant effects on the real component of the bond rate. This...

An equation explaining the long-run behavior of the bond rate from 1971 to 1993 indicates that inflation is the main long-run economic determinant of the bond rate. Monetary policy actions have short-run but no long-run effects on the rate. During the subperiod 1979 to 1993, however, some...