Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (74433)	2/7/2008 7:00:21 AM
From: Dan3	Read Replies (1) of 116555

Re: I think treasuries make a new all time low in yield. Given that we already have negative interest rates (official inflation at 4.1% and funds rate at 3%) how much lower do you think they can go? The December level of 210.036 (1982-84=100) was 4.1 percent higher than in December 2006. bls.gov Either a big inflation or big deflation could cause a big drop (or increase) in real rates. A big deflation would, of course, increase real rates, which should act to raise treasury prices and reduce real yield, but the wall of 0% nominal rates limits that. The current steep yield curve isn't helping prospects for future growth.

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