tag:blogger.com,1999:blog-8515247115132134144.post2095260729320769753..comments2024-02-17T12:34:01.400-08:00Comments on Illusion of Prosperity: Ben Bernanke's 10 Minutes Off (Musical Tribute)Stagflationary Markhttp://www.blogger.com/profile/04568993350246477976noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-8515247115132134144.post-51264184614433573172011-09-21T16:43:18.420-07:002011-09-21T16:43:18.420-07:00Audrey,
Look, it's real simple. Whatever mile...Audrey,<br /><br /><i>Look, it's real simple. Whatever mileage we put on, we'll take off.</i> - Ferris BuellerStagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-84879714787809552652011-09-21T16:37:44.508-07:002011-09-21T16:37:44.508-07:00nanute,
In theory, selling 400 billion of short t...nanute,<br /><br />In theory, selling 400 billion of short term holdings would drive short term rates higher.<br /><br />In practice, there are apparently plenty of buyers to keep short term rates low even without the Fed's help. The 3-month treasury is yielding 0.01% right now.<br /><br />That alone should spook the stock market.<br /><br />I'm not really sure that the Fed is doing anything that the market itself wouldn't be doing. I was certainly willing to buy long-term bonds (TIPS) in February. It wasn't because I thought the Fed would be buying them someday. It is and was my plan to hold them to maturity. Once I bought, did I really care what the Fed did?<br /><br />Also consider this. What if the market thinks 3-month treasury bills are still a bargain at 0.0%? 0.0% is the floor. What would the rate be if the floor did not exist? Who knows?Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-55137969104634220642011-09-21T15:45:37.406-07:002011-09-21T15:45:37.406-07:00Nice take on the debacle.Nice take on the debacle.Audreynoreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-38742316917892746942011-09-21T15:41:03.148-07:002011-09-21T15:41:03.148-07:00Mark,
What does the Fed's action do to short t...Mark,<br />What does the Fed's action do to short term rates? (Selling 400 billion of short term holdings and purchasing and equal amount of 6-30 year bonds.) Will this, in theory, drive short term rates higher?nanutenoreply@blogger.com