Hi Jim,..Re:.What is happening with the interest rates on bonds and T-bills? They seem to have been creeping up higher than I would have expected.
I think we're getting back to normal, at least a semblance of normal. When we got down to 4.7% on the long bond, it was because of 'flight to quality' buying.
bigcharts.com
economeister.com
US TSY MKT OUTLOOK: BULLISH ON WEAK STOCKS, SHAKY WORLD MKTS
Treasuries have continuously received a flight-to-quality bid which has propelled the market to record highs --most recently after
the bail-out of Long-Term Capital Management.
economeister.com
US TSY MKT ENDS OFF HIGHS BUT UP SHARPLY ON WEAK STOCK MKT
The 30-year cash bond marked a 3:00 p.m. EDT close at an
all-time low yield of 4.712%.
"The flight-to-quality bid remains," said a cash trader with an
investment bank in New York. He added he was "seeing fairly active
short-Treasury buying from foreign accounts. Obviously there's some flight-to-quality going on."
Also, from all that we have seen from the eco numbers, most recently the GDP of 3.3%, our economy is not weak, only slowing slightly. In this context, (strong eco data), yields of 4.7% don't correlate with with the actual eco numbers.
dismal.com
But we may see more easing because of the credit crunch/liquidity problem which, in my understanding, is a bigger threat to our economic well being going forward.
I'm looking for equilibrium rates around 5.75% for the current data but yield is distorted by foreign buying. This is at the least a big disturbance to so-called equilibrium levels, so I have no idea if we would eventually get there.
Hope this is clear.<vbg> (heavy stuff)
Regards,
Lee |
