As the Fed cuts its buying program, we are left with two major categories of purchasers – foreign and private domestic.
The treasury yield curve remains quite steep by historical standards. Typically such steepness is driven by expectations of higher inflation in the future. But as discussed earlier, that is not the case in the US (see post). Instead it is the expectati…
Since the Fed announced the reduction in securities purchases (“small taper”), the treasury curve has undergone some strange adjustments. Here is what the impact has been since the close on December 17th. Why would the 5-year note sell off the most whi…
This is a syndicated repost published with the permission of Sober Look. To view original, click here. Opinions herein are not those of the Wall Street…
Rather, Bernanke said, “given weakness in the labor market – the fact the unemployment rate probably understates the weakness of the labor market – and given where inflation is, I would suspect it may be well some time after we hit 6.5% before rates reach any significant level.
It is remarkable how the treasury market reversed the impact of Bernanke’s original hawkish comments made back in May (see post). A very similar daily move took place in the “belly” of the curve today with yields moving in the other direction.In spite …