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To: GraceZ who wrote (34631)	3/20/2002 1:36:46 PM
From: NOW	Read Replies (1) \| Respond to of 209892

can you explain that? It sounds counterintuitive: i thought the price of nearly everything was a maater of supply and demand, sellers and buyers...

To: GraceZ who wrote (34631)	3/20/2002 2:00:39 PM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 209892

<<(that if the FED raises short rates it'll push guys like him out of the roll down game into long bonds lowering the yield by raising the price), when in fact long bond rates are set by expectations for inflation. I'd say it's not such a dubious assumption...if the Fed raises short rates, it'll decrease inflationary expectations, too...either way, the long bond would benefit.

To: GraceZ who wrote (34631)	3/20/2002 2:02:57 PM
From: VS	Read Replies (1) \| Respond to of 209892

>Bill's premise rests on the dubious assumption that long rates are based on supply and demand (that if the FED raises short rates it'll push guys like him out of the roll down game into long bonds lowering the yield by raising the price), when in fact long bond rates are set by expectations for inflation. JMO-Long rates, like all other markets, are based on supply and demand. Inflation expectation is an important factor among several that influence the level of supply & demand. Vince