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Politics : Ask Michael Burke
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To: Les H who wrote (70085)11/4/1999 4:17:00 PM
From: Freedom Fighter  Read Replies (1) of 132070
 
Les,

There seems to be a group of analysts that think that raising the Fed Funds rate causes the long term treasury yield to rise also. Perhaps it has something to do with leveraged positions. I'm not sure.

My view is that it should work the other way around.

Tighter money lowers the probability of inflation and slows the economy. I would expect long yields to fall a little based on that scenario.

If on the other hand, he leaves rates alone, I would think yields might rise (or should rise).

Then again, this is a "new era". (g)

Wayne
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