Fed Policy Debate In Full Swing, Climate Change Issue Re-Emerges

At the end of June in 2004, Alan Greenspan was Chairman of the Federal Reserve and was nearing the end of a long and illustrious tenure. At that months’ meeting of the FOMC, the committee raised the federal funds rate 25 bps, from 1% to 1.25%. For the next sixteen consecutive meetings, the committee would take the same measured action.

A funny thing happened, though. The 10-yr and rates on mortgages that are typically closely correlated didn’t go up as you would expect them to. This phen...

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