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Treasury yields may rise after QEII ends, but not because the Fed has concluded its massive...

Treasury yields may rise after QEII ends, but not because the Fed has concluded its massive purchases. Instead, current weak economic data almost assures a bounce in July, with yields likely to follow. Still, with fund managers able to finance a bond portfolio at 0.25%, any rise in long term yields will be modest.
Comments (4)
  • tigersam
    , contributor
    Comments (1711) | Send Message
     
    TBT came down from 40 to 32. It is time to get into TBT.
    17 Jun 2011, 11:29 AM Reply Like
  • jtk7
    , contributor
    Comments (19) | Send Message
     
    So what exactly was the point of QEII if it wasn't to keep yields low? This is pretty ridiculous. Saying rates won't rise as a result of saying QEII ends is saying that QEII wasn't effective.
    17 Jun 2011, 12:00 PM Reply Like
  • surfgeezer
    , contributor
    Comments (6829) | Send Message
     
    #1- The FED is NOT ending Treasury purchases, it IS reinvesting ALL payments or to be more precise all PROFITS. Be careful of the terminology and spin. Yes it is debt, but it is MAKING profit. Why do financial advisors tell people to buy bonds, then COMPLETLY discount the profits from the FED doing the EXACT same thing. The debt is POLITICAN's, not the FED people! Higher rates kill people who abuse credit!

     

    TIC flows came out yesterday for April and in fact the total TIC showed about 30.6 billion with an April trade deficit of 43.6 billion. SO- 13.6 BILLION in capitol flows deficit, I would love to hear from a better digger than me on how much the Fed bought of Treasuries in April.

     

    Capitol flows are what is the fundamental driver of exchange rates. The FX market is as crazy as the stock market. You can find lots of good company earnings, but the price is probably getting hammered from the pull back.

     

    SAME is true for dollar. The capitol flows SHOW the dollar SHOULD go down, but the Greek crisis is subverting the trend. Just saying- pay attention to fundamentals folks.
    17 Jun 2011, 12:17 PM Reply Like
  • Rob Viglione
    , contributor
    Comments (331) | Send Message
     
    I've been short, or underweight, treasuries for the last couple years. Two convictions I've retained:

     

    1) Timing markets is gambling

     

    2) Long term treasuries are doomed
    17 Jun 2011, 04:23 PM Reply Like
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