Keywords
Yield curve
Keynesian Theory
Liquidity Preference
How to Cite
Abstract
Atypical behavior of interest rates has been frequent in developed economies. Despite being intuitively improbable, sovereign bonds with negative interest rates are present in most European countries and the forward curve of Treasury bonds showed an inversion for months in the United States. This article presents the influence of the use of conventional and unconventional monetary policy instruments by Central Banks on the aforementioned phenomena, and an interpretation based on Keynes' Liquidity Preference Theory. This interpretation explains, based on the behavior of agents, why public and private asset purchase programs, the control of the forward curve and the communication model based on the future prescription (forward guidance) of Central Banks can influence the financial markets , with relatively persistent effects. This situation has allowed the occurrence of unusual phenomena related to interest rates.
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