Once again interest rates are tumbling this morning as Federal Reserve folks continue their dovish talk. There is something a bit strange that all of a sudden these folks are all talking dovish when only a month ago most of them were hawkish–seems to me that political pressure is getting to them.
The 10 year treasury is at 4.59% this morning–almost 30 basis points below the close last Friday. In the end the marketplace will determine the price of the treasuries and over the medium to long term we have huge supply caused by the inability to restrain government spending–regardless of the Fed we may well see rates higher, but of course who knows for sure.
Well we had the producer price index (PPI) just released–tomorrow is the consumer price index (CPI). The PPI has come in hotter than expected—but the CPI will be more critical. Obviously these are important numbers as we are just 2 1/2 week out from the next FOMC meeting.
Well let’s see if we get a bit more rallying in income issues–yesterday there was a small move higher–a refreshing rally OR a temporary move that does not last long. Of course – no one knows.