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Politics : Idea Of The Day

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To: Logain Ablar who wrote (17525)3/22/1998 11:56:00 PM
From: IQBAL LATIF  Read Replies (1) of 50167
 
Are you talking about an inverted yield curve long rates lower then the short term early signal of slow down or deflation --I don't think other then BCA and Krugman anyone else anticipates that I see strong economy any rate hikes will be due to wage pressure commodity is just not an issue that will before any rate hike happpens we will have a major sell off to 992 alongwith sharp upward movement of the long end-- It will be at 992 and yields above 6% thatj any upward short end movement from Fed will be initiated but it will be proceeded by yields above 6% it will only be with a lag if market realises that economy is slowing down that bond yields may dip but then Fed action will look pre-emptive and foolish if deflation is sensed by forward looking bond markets a rate rise would look an error.

At the present with economy strong vital indicators any probable rate rise will be on inflationary fears not deflationary hence bond yields or yiled curve will be more reflective of a inflationary environment then a deflationary.
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