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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: mishedlo who wrote (30501)5/21/2005 12:47:25 PM
From: Crimson Ghost  Read Replies (1) of 116555
 
A theory on the Treasury market.

The long bond seems to be discounting an expected Fed pause and reversal WAY IN ADVANCE. But perversely this advance discounting means that asset bubbles continue to expand.

This in turn could require the Fed to hike rates more than expected if the real estate bubble is to be reigned in.

Another possibility -- TNX yields EXPLODE when the Fed finally does pause as thousands of hedge funds rush to cash in their chips by selling on the news.
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