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Super inteteresting. And then, "It is not that interest rate hikes don’t work. Instead, the variable lags tend to partially eliminate the impact of rate hikes on the economy." ... I also understand this to mean that, because when you have an interest rate raise, which will take effect ca. 40 months later, but then already 25 months later you have a cut again, there is so much noise of lagging and overlapping effects of raises and cuts that it's hard to actually link an interest raise/cut to an outcome?

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Correct, that's what I think is happenning.

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Exciting. The answer would be even more exciting: what is happening in the current cycle of interest rate cuts? If it takes longer to send signals again because of the service society, it would actually be almost logical that large interest rate increases/decreases of several percent would hardly be tradable any more - then, something else will be sent in these multi-year time frames anyway. Or is the interest rate path down to be judged differently? Thanks!

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I don't think the interest rate path down is different from the way uo. But I agree with your statement that it is much harder today to trade interest rate cycles because they get diluted so much with other stuff. Just think of the US election and how that will change the interest rate outlook if Trump runs up massive deficits.

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