The Term Structure of Interest Rates, Monetary Policy and Macroeconomic Target

This paper investigates the relationship of the term structure of interest rates and the movements of macroeconomic targets such as GDP and the inflation rate through the conducting mechanism between monetary policy and term structure, as well as that between monetary policy and macroeconomic targets. Empirical evidence in recent years of China has proved this predictability. Advice is proposed on how to control or avoid economy overheating, high inflation through the observation of term structure.