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Richard Barley has a kind word for bonds (currently in the midst of a savage sell-off), saying...
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Friday, September 14, 2012, 11:13 AM ETRichard Barley has a kind word for bonds (currently in the midst of a savage sell-off), saying the global growth outlook continues to be dismal despite the Fed and ECB. Could the curve get steeper still? Sure, but the date of any increase in short rates keeps getting pushed further into the future, which should help anchor the long end.
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Hint: The Fed can buy everything outstanding if they had to, especially when they can create dollars virtually.
The only problem, in that scenario, is that the USD will suffer quite impressively against a basket of other major currencies.
Is the FED trying to trigger a bond selloff?