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According to an internet based Bloomberg page, the yield on the 10 year TIPS has declined 10 basis points to 1.21 percent. The yield on the nominal 10 year note has edged lower by about 3 basis points.

I think the TIPS outperformed by about 10 basis yesterday so that makes a total of 17 basis points thus far.

On a philosophical note it seems that the actions of our central bank and other major central banks are one more nail in the coffin of the era of bond market vigilanteism which began with Paul Volcker’s bold move to change the way the Federal Reserve operated in 1979.

His action ushered in an era in which financial markets and financial products flourished. I do not question that there are many sound reasons for the current policy stance of the Fed and its other central bank brethren, but those actions will have broad ranging results for years to come.

Against that background it would seem that hard assets should thrive as we venture forth into a brave new world. Take a peek at the commodity complex and whatever you allocated before, it should be some larger amount now.

Source: Watching TIPS, And Commodities Tips