To say that the clarion call to buy bonds was "poorly timed" does a disservice to poorly timed calls everywhere. Just horrible. Macro Man was stopped at 104-31 yesterday, and more carnage has ensued since. Macro Man is understandably tied up this morning; more later.
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ReplyThis is nothing more than Bernanke emphasizing what he's been saying for months and Gross reiterating last month's PIMCO 'secular outlook'. Its not even clear that Gross changed the upper bound for bonds by 1 per cent in the space of one month. If he did, there's no justification for it based on the data, and it would merely point to the fragility of his secular thought process. (The 6.5 applies to his 3 to 5 year outlook.)
This move is mostly about the market not listening or reading Bernanke correctly in past months. The bias was there all along, notwithstanding the Fed scribes' illiteracy in constructing grammatically correct and understandable statements (the written statements are actually sloppier than in Greenspan's day).
I don't think so. I think the US bond market has to be prepared for less FCB participation and seeing how that were most of the bid has come from the game is up. Also the interest rate gap between europe and other countries is narrowing. Japan is going to have to hike again at some point.
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