Same old theory - With a stimulative monetary policy, the yield curve would only get steeper, based on long term inflationary expectations. No surprise there.
Hmmm fed cuts rates by .5% and 10 year treasuries are tanking
Started by
dcengr
, Sep 20 2007 09:47 PM
12 replies to this topic
#12
DonBart
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- Traders-Talk User
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Posted 21 September 2007 - 07:47 AM
Same old theory - With a stimulative monetary policy, the yield curve would only get steeper, based on long term inflationary expectations. No surprise there.
Nope. If it was inflation expectations then the TIPS spread would be widening and it is not. Maybe it's instead forecasting an increase in REAL GDP (Nominal GDP-Inflation). You know strong growth and low inflation ie. the Fed got it right? Or that's right I forgot Bernanke is a moron and we should have TT traders who are so much smarter running the Fed
#13
NAV
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- Traders-Talk User
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Posted 21 September 2007 - 10:55 AM
Same old theory - With a stimulative monetary policy, the yield curve would only get steeper, based on long term inflationary expectations. No surprise there.
Nope. If it was inflation expectations then the TIPS spread would be widening and it is not. Maybe it's instead forecasting an increase in REAL GDP (Nominal GDP-Inflation). You know strong growth and low inflation ie. the Fed got it right? Or that's right I forgot Bernanke is a moron and we should have TT traders who are so much smarter running the Fed
Bernanke is not a moron, but those who trust in him or the Fed in general. You are right though, independent thinking is bad. Blind faith in Bernake and his cronies is all that we need to survive in today's environment.
BTW, TIPS is a fraud (just like the CPI it's adjustment is based on). If i trust TIPS would offset my inflation costs, i would have been in poorhouse long back.
