The Fed may lower its funds rate in the short term, but Jim in San Marcos is predicting steep rises in worldwide interest rates and (therefore) a sell0ff in suddenly-very-uncompetitive bonds.
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I believe bonds will not crash.
ReplyDeleteHere's why:
Credit crunch side-effects:
Why US treasury bond may soar
Do you go along with that, Sackers - that rates will rise steeply?
ReplyDeleteWith the spread high, interest rates will be lower, so real borrowing costs do not increase too much.
ReplyDeleteIMHO of course.
Thanks, all: I struggle with this issue in my next post.
ReplyDelete