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Strategies & Market Trends : The Contrarian's Corner

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To: HeyRainier who wrote (106)9/27/1998 4:00:00 PM
From: Elroy Jetson   of 113
 
Of course the yield on 30 year US Treasuries should increase as the Fed decreases short term rates. This has already happened.

Over the past week the 30 yr has increased from 5.08% to 5.12% while the 90 day has decreased from 4.56% to 4.39%.

A Depression with no outlook for recovery might push 30 year Treasuries down to 2%, but the slightest hint of inflation during the next 30 years would push yields up. The Fed easing monetary policy by lowering the overnight Fed Rate makes a Depression less likely and a robust economy producing asset inflation more likely.
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