Steve Randy Waldman
@interfluidity.com

i think the theory is when GDP growth is high, investment returns are high across the risk spectrum, so including risk-free rates. it's kind of a thin theory i think — it seems to me GDP growth could be high despite ample cash availabilty, and high RFR suggests people hungry just for cash.

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Steve Randy Waldman
@interfluidity.com

another way to argue it is if you think a high GDP growth economy is a "hot" economy, so inflation risks are higher, so Fed is more likely to raise.

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