that makes sense, Marv. But if the "recovery" continues to be so anemic, the FOMC may reverse its threat of "tapering." It's likely that the (financial) investors are more optimistic about the US and world economies' prospects than I am. After all, they say, the stock market is doing so well!
Jurriaan Bendien wrote: > > >So why are rates rising? < > > me: > > I don't know. It's possible that lenders are switching strategies, from > credit rationing to using interest rates. > > Marv: > Investors are speculating that the Fed will, in line with its "forward > guidance", begin tapering its purchases of MBS's and Treasuries, probably > by about $15 billion a month (from $80b) later this year, possibly as soon > as next month. This reduction in Fed demand is expected to push yields up > and prices down, reducing the worth of the current bond portfolios of the > banks, hedge funds, and other domestic and foreign investors. So they're > selling on the rumour, forcing rates up in anticipation. > > > > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Jim Devine / "Reality is that which, when you stop believing in it, doesn't go away." -- Philip K. Dick
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