Minyan Mailbag - Fed Speak
Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next column with that very intent.
Dear Professor Succo:
What's your take on the Fed Speak? They have not been likely to give the market what it wants, IMO. Up a quarter, no change in language and 5.60 in the 10 year is my opinion. What say you?
I think the "reported" PPI this morning takes any pressure off the Fed to do more. Any Fedspeak related to cautioning the markets that it may get more aggressive in the future will be presented in the light of economic growth.
At the same time the Fed raises short term rates, they have been carefully working behind the scenes to make sure that long term rates, the really important part of the curve, do not rise commensurately. If this were to happen, it would derail the liquidity train.
I continue to believe that a correction in the bond market is necessary for a significant correction in stocks. I am not convinced of it however. I continue to believe I will win my bet with Scott.
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