Treasury Yields, Stay!
04/04/2011 | | Accelerating Economy, econ70.com, Elliot's Blog, Graphsandlaghs.net, Inflation, QE3, Rising Supply of Credit, Treasury yields
There seems to be widespread view that Treasury yields will rise sharply once QE2 is over since the captive market for bonds, the Federal Reserve, will be gone. Wrong, wrong, wrong! The only way Treasury yields will increase is if we have an accelerating economy (not), rising credit demands met by increases in bank lending (not) and heightened inflation risk (not).