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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: NOW who wrote (25284)1/25/2005 9:05:47 PM
From: Wyätt Gwyön  Read Replies (1) of 110194
 
they basically presented a number of reasons why the Fed may actually hike 50bp sometime soon, with an eventual target Funds rate of 4% (2.43% above core PCE is the Greenspan career average, and YoY core PCE is now 1.5%). the main reason is: Shock Value. the Fed gets much more bang for its buck if it moves in ways the market does not already anticipate. they showed an interesting chart of the 94-95 Fed hikes and 10yr yield moves to prove their point.

when you read the article, it starts to sound realistic.

and, they remind us, don't forget what Greenspan himself said late last year, regarding higher yields: anybody who hasn't hedged that move is "desirous of losing money".
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