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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: el paradisio who wrote (48933)	5/2/2000 11:46:00 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

el p, bonds and stocks have basically de-coupled since the '98 crisis. however, if we see more evidence of increasing inflationary pressures, my bet is that they will re-couple. basically de-coupled debt and equity markets are a sign that inflation is not the market's main concern. if they start moving in tandem again, it should benefit commodities, as liquidity flowing out of paper assets will find a home there. a 50 bp. hike would probably be good for the long end of the bond market...the question is, will we get one? i have argued for a long time that the Fed is behind the curve, as in real terms its policy is not tight at all. recent economic data have borne this out. the desire not to 'shock' the markets may well keep them behind the curve. regards, hb