There is no economic data set for release today. Traders will watch stocks and each other to help gauge interest rate direction. At the 10:00 am EDT price point the Dow was up 67 points. What happened this week? Frequent readers of this page and those who have been on the conference calls with RateLink knew that market rates would adjust before the Federal Reserve altered monetary policy. We call it Guess the Fed, where global traders look for any sign that policy may be adjusted in the FUTURE and react today by buying or selling assets. Who wants to hold a 10-year Treasury paying 1.67%, which it was a few weeks ago, when the exact same bond is currently paying 2.4%? Many, to include St. Louis Fed President James Bullard believe Ben Bernanke spoke too early. Everyone knew if the economy continued improving the Fed would taper asset purchases and eventually remove all accommodations. It was the WHEN that was unknown. When Bernanke spoke of an exit plan earlier this week traders got to work selling assets to lock in profits an prepare for a higher interest rate environment ahead. Like Bullard said in the interview, it is way too early in the recovery to see a spike in rates. The economic recover was already weak by most standards and higher rates will not help. Wonder how Ben is going to work his way out of this. Thank you RateLink!
Posted on: Fri, 21 Jun 2013 16:12:07 +0000
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