@techreport{NBERw13419,
 title = "Cracking the Conundrum",
 author = "David K. Backus and Jonathan H. Wright",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "13419",
 year = "2007",
 month = "September",
 URL = "http://www.nber.org/papers/w13419",
 abstract = {From 2004 to 2006,  the FOMC raised the target federal funds rate by 4.25%, yet long-maturity yields and forward rates fell.  We consider several possible explanations for this  "conundrum."  The most likely, in our view, is a fall in the term premium, probably associated with some combination of diminished macroeconomic and financial market volatility, more predictable monetary policy, and the state of the business cycle.},
}