If you look at what’s happening with Treasury yields on the 2yr, 3yr, 5yr, 7yr, 10yr, 20yr and 30yr bonds it implies that fixed income investors believe that the Fed is not taking rates back to zero. The 10 year Treasury bond yield still looks too low relative to the 5yr, 7yr and 20yr (I’d like to see the 10yr at 4.50% to 5.00%), but these yields look more realistic versus where they were 4-8 weeks ago. Taking the Fed Funds rate back to zero will only encourage the type of fiscal and monetary behavior that hollowed out the Dollar’s purchasing power while burying the U.S. under a mountain of debt ($33.04 Trillion as of Sept. 15th).
Check out Treasury Yields HERE.
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