Bernanke and the Fed are starting to panic…

[Bob]

During the past four days, the Federal Reserve has made a few statements that were leaked to the press that are very interesting…

One is a Reuters story by Alister Bull.

“Federal Reserve puzzled by yield curve steepening.”

The Federal Reserve is studying significant moves in the U.S. government bond market last week that could have big implications for the central bank’s strategy to combat the country’s recession.

But the Fed is not really sure what is driving the sharp rise in long-dated bond yields, and especially a widening gap between short and long term yields.

Do rising U.S. Treasury yields and a steepening yield curve suggest an economic recovery is more certain, meaning less need for safe haven government bonds and a healthy demand for credit? If so, there might be less need for the Fed to expand the money supply by buying more U.S. Treasuries.

Or does the steepening yield curve mean investors are worried about the deterioration in the U.S. fiscal outlook, or the potential for a collapse in the U.S. dollar as the Fed floods the world with newly minted currency as part of its quantitative easing program. This might be an argument to augment to step up asset purchases.

Another possibility is that China, the largest foreign holder of U.S. Treasury debt, has decided to refocus its portfolio by leaning more heavily on shorter-term maturities…

What this article really suggests is that Bernanke and the Federal Reserve have no idea what is really going on and they are spooked. How they eventually react will decide the fate of the US economy and the housing recovery. One thing I can confidently predict is that mortgage rates will be considerably higher by the end of the year, which will put further downward pressures on prices.

[meadandale]

The Fed needs to look no further than the administration’s ass-ramming of the GM bond holders at the expense of the unions to realize that future bond buyers are going to want a helluva a premium for the new risks.

[meadandale]

The Fed needs to look no further than the administration’s ass-ramming of the GM bond holders at the expense of the unions to realize that future bond buyers are going to want a helluva a premium for the new risks.

[meadandale]

The Fed needs to look no further than the administration’s ass-ramming of the GM bond holders at the expense of the unions to realize that future bond buyers are going to want a helluva a premium for the new risks.

[meadandale]

The Fed needs to look no further than the administration’s ass-ramming of the GM bond holders at the expense of the unions to realize that future bond buyers are going to want a helluva a premium for the new risks.

[meadandale]

The Fed needs to look no further than the administration’s ass-ramming of the GM bond holders at the expense of the unions to realize that future bond buyers are going to want a helluva a premium for the new risks.

[4plexowner]

“What this article really suggests is that Bernanke and the Federal Reserve have no idea what is really going on and they are spooked.”

they know exactly what is going on – it’s just that what is going on isn’t what they want to be going on

they can’t acknowledge that they have been trying to drive down interest rates because it would be obvious that they have failed

instead they make comments about ‘studying the situation’ so the sheeple think they actually know what they are doing and have some control in the situation

[4plexowner]

“What this article really suggests is that Bernanke and the Federal Reserve have no idea what is really going on and they are spooked.”

they know exactly what is going on – it’s just that what is going on isn’t what they want to be going on

they can’t acknowledge that they have been trying to drive down interest rates because it would be obvious that they have failed

instead they make comments about ‘studying the situation’ so the sheeple think they actually know what they are doing and have some control in the situation

[4plexowner]

“What this article really suggests is that Bernanke and the Federal Reserve have no idea what is really going on and they are spooked.”

they know exactly what is going on – it’s just that what is going on isn’t what they want to be going on

they can’t acknowledge that they have been trying to drive down interest rates because it would be obvious that they have failed

instead they make comments about ‘studying the situation’ so the sheeple think they actually know what they are doing and have some control in the situation

[4plexowner]

“What this article really suggests is that Bernanke and the Federal Reserve have no idea what is really going on and they are spooked.”

they know exactly what is going on – it’s just that what is going on isn’t what they want to be going on

they can’t acknowledge that they have been trying to drive down interest rates because it would be obvious that they have failed

instead they make comments about ‘studying the situation’ so the sheeple think they actually know what they are doing and have some control in the situation

[4plexowner]

“What this article really suggests is that Bernanke and the Federal Reserve have no idea what is really going on and they are spooked.”

they know exactly what is going on – it’s just that what is going on isn’t what they want to be going on

they can’t acknowledge that they have been trying to drive down interest rates because it would be obvious that they have failed

instead they make comments about ‘studying the situation’ so the sheeple think they actually know what they are doing and have some control in the situation

[Arraya]

“We are watching a poorly staged rendition of Wag the Dog , interpreted for the morbidly stupid and performed by the criminally insane.” – Jules Carlysle

[Arraya]

“We are watching a poorly staged rendition of Wag the Dog , interpreted for the morbidly stupid and performed by the criminally insane.” – Jules Carlysle

[Arraya]

“We are watching a poorly staged rendition of Wag the Dog , interpreted for the morbidly stupid and performed by the criminally insane.” – Jules Carlysle

[Arraya]

“We are watching a poorly staged rendition of Wag the Dog , interpreted for the morbidly stupid and performed by the criminally insane.” – Jules Carlysle

[Author]

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