SubscribeDaily Futures Commentary May 1, 2009
Friday, May 1, 2009
June Treasury Bonds and June Treasury Notes continue to drift lower as yields rise. This current downtrend doesn’t look like speculation that rates will rise but seems to be reflecting the true condition of the economy at this time.
Experts have been saying for months that rates would rise but many investors seemed to think there would be a sudden spike in rates due to the massive amount of debt created by the Treasury. Instead we have been seeing a gradual increase rather than a huge surge.
Rates should continue to rise into next week which means lower financial instruments as the Treasury is poised to issue additional long-term debt. There doesn’t seem to be a panic about this refunding. The Fed seems to be in control of the situation as it increases its balance sheet buy purchasing government assets.
The purpose behind buying assets is to keep mortgage rates down to encourage new mortgages while refinancing old. The Fed seems interested in only accomplishing this while holding yields steady. I don’t recall ever seeing that they would stop rates from moving higher. At …
Read More …
Loading ...
