We expect the boost from lower long-term interest rates to outweigh any negative impact on economic growth from the stronger dollar. The 10-year yield started the year at 3.0%, but most recently has slumped to a 16-month low of 2.3%. Just as the "taper tantrum" spike in yields last year forced the Fed to delay reducing the pace of its asset purchases until late 2013, we're beginning to wonder whether the reverse is now true, i.e. whether the decline in long-term interest rates could prompt the Fed to hike its policy rate sooner.
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