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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: bart13 who wrote (69986)9/20/2006 10:08:22 AM
From: J_Locke  Read Replies (2) of 110194
 
The fed talked about manipulating the long end of the yield curve during the great 'deflation' scare of '02. They could easily buy 10 year treasuries through open market operations if they chose to. Thus far they have not chosen to.

Bear in mind that foreign central banks now own more than 50% of the outstanding float of treasuries and perhaps an even larger share of the 10 year note. The FCB's and carry traders are ultimately in control of the yield curve. It would be naive to think that the major players (Bank of Japan, People's Bank of China, Saudis) are not co-ordinating their activities with the fed.
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